Marketing of Fruits and Vegetables in India: A Study Covering The Ahmedabad, Chennai and Kolkata Markets

Marketing of Fruits and Vegetables in India: A Study Covering the Ahmedabad, Chennai and Kolkata Markets
Vasant P. Gandhi N. V. Namboodiri Abstract There has been concern in recent years regarding the efficiency of marketing of fruits and vegetables, and that this is leading to high and fluctuating consumer prices and only a small share of the consumer rupee reaching the farmers. Marketing of horticultural crops is complex especially because of perishability, seasonality and bulkiness. The study seeks to examine different aspects of their marketing, focusing particularly, on the wholesale markets for fruits and vegetables which have been established to overcome deficiencies and improve the marketing efficiency. Results indicate that in Ahmedabad the direct contact between commission agents and farmers is very low. For vegetables this is 50 percent and for fruits only 31 percent. Further, in the system of transaction, secret bidding and simple transaction dominate and open auction is relatively rare. In KFWVM, Chennai, the wholesalers act as commission agents and receive consignments directly from producing centers through agents or producers. By and large the system of transaction remains traditional and open auction is rarely seen. This is one major reason for poor efficiency. However, in the small AUS market in Chennai, the farmers sell directly to consumers. The share of farmers in the consumer rupee in Ahmedabad was 41.1 to 69.3 percent for vegetables and 25.5 to 53.2 percent for fruits. In Chennai KFWVM, the farmers' share was 40.4 to 61.4 percent for vegetables and, 40.7 to 67.6 percent for fruits. In the small AUS market in Chennai, where the farmers sell directly to the consumers, the share of farmers was as high as 85 to 95.4 percent for vegetables. This indicates that if there are few or no middlemen, the farmers share could be much higher. In the Kolkata market the share of farmers ranged from 45.9 to 60.94 percent for vegetables and 55.8 to 82.3 percent for fruits. Thus, the shares are frequently very low, but somewhat better in Chennai, lower in Kolkata and even lower in Ahmedabad. The margin as a percentage of farmerconsumer price difference (an efficiency measure) shows that in Ahmedabad, the margins are very high and range from 69 to 94 percent. In Chennai they range from 15 to 69 percent, and in Kolkata they range from 46 to 73 percent. The high percentage of margin to farmer-consumer price difference is indicative of large inefficiencies and relatively poor marketing efficiency. There is great need to improve the marketing of fruits and vegetables. One important measure would be to bring more markets under regulation and supervision of a well-represented market committee. Another measure would be the promotion and perhaps enforcement of open auctions in the markets. Yet another measure could be efforts to bring more buyers and sellers into the markets, bringing them closer to perfect markets. The direct participation of farmers should be increased. Market infrastructure should be improved through storage (go-down) facilities, cold storages, loading and weighing facilities. Improvement in the road network, and cold-chain facilities are also of substantial importance. Greater transparency of the operations through supervision and systems can also help substantially. The market integration and efficiency can also be improved by making up-to-date market information available to all participants through various means, including a good market information systems, internet and good telecommunications facilities at the markets.
Marketing of Fruits and Vegetables in India: A Study Covering the Ahmedabad, Chennai and Kolkata Markets1
Vasant P. Gandhi N. V. Namboodiri
1. Introduction
The efficiency of marketing for fruits and vegetables in India has been of significant concern in the recent years. Poor efficiency in the marketing channels and inadequate marketing infrastructure are believed to be the cause of not only high and fluctuating consumer prices, but also to little of the consumer rupee reaching the farmer (see Kaul 1997, Ashturker and Deole 1985). Indian farmers typically depend heavily on middlemen particularly in fruits and vegetable marketing. The producers and the consumers often get a poor deal and the middlemen control the market, but do not add much value. There is also massive wastage, deterioration in quality as well as frequent mismatch between demand and supply both spatially and over time (Subbanarasiah 1991, Singh M et.al. 1985). In the light of these concerns, studies were taken-up at Ahmedabad (by CMA, IIM, Ahmedabad), Chennai (by Agro-Economic Research Centre, University of Madras, Chennai), Kolkata (by AgroEconomic Research Centre, Visva-Bharati, Santiniketan), and Delhi (by Agro-Economic Research Centre, University of Delhi, Delhi) wholesale markets, under the coordination of CMA, IIM, Ahmedabad. The studies sought to examine various aspects of the marketing of fruits and vegetables in the wholesale markets with a view to improve the marketing efficiency. (The study on the Delhi market was not yet complete.) This paper consolidates the results from Ahmedabad, Chennai, and Kolkata markets. Fruits and vegetables typically constitute an essential part of the daily diet in India and they are in great demand round the year from most sections of the population. The commercial value of fruits and vegetables in terms of direct consumption, processing as well as trade has
The authors wish to acknowledge with thanks the contributions from the studies done by A. Pushpavalli and M. Lakshminarayanan of the Agro Economic Research Centre, University of Madras, Chennai, and Kazi MB Rahim and Debashis Sarkar of Agro-Economic Research Centre, Visva-Bharti, Shantiniketan. Assistance provided by Suresh Sharma and C.J. Varughese at Ahmedabad is acknowledged with thanks.
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risen substantially in recent years. Their economic importance has also increased and high labour intensity in the production of most fruits and vegetables production also makes them important from the employment angle as well (Sharma 1991). Increase in area allocation under horticultural crops has often been suggested as a measure for agricultural diversification, increased employment and income (Malik, 1998). In light of these issues, this study seeks to examine the market environment for fruits and vegetables in three major cities in the country viz., Ahmedabad, Chennai and Kolkata. It examines various aspects of fruits and vegetable marketing such as market infrastructure, marketing practices, marketing costs etc. in the wholesale markets in the selected cities. The study also made an attempt to identify the prevailing value chain from the Farmer Preharvest contractor Commission Agent Wholesaler Retailer Consumer of costs, prices and their shares in the selected markets. 1.1 Methodology The present study is based on information collected from: the market officials of the selected fruits and vegetable markets, commission agents/wholesalers, retailers and farmers in and around the selected cities. The market officials were interviewed/consulted for gathering the information on the overall activities of these markets, marketing infrastructure and other related information. Data were collected from the wholesalers/commission agent, retailers and farmers through structured questionnaires. The sample in this study for the Ahmedabad market comprised of commission agents, retailers and farmers; for Chennai market the sample comprised of wholesalers, retailers and farmers and for Kolkota market the sample include wholesalers, intermediaries and farmers. Details of the sample are given in Table 1.1 Three regulated markets namely CJ Patel Market (CJP), Sardar Patel Market (SP) and the Naroda Fruit Market were studied from the Ahmedabad city. Number of sample respondents in the CJ Patel market includes 30 commission agents, 28 retailers and 26 farmers. These respondents were dealing with only potato and onion. In Sardar Patel market yard we have interviewed 30 commission agents, 30 retailers and 21 farmers deal with a wide range of vegetables. The Naroda wholesale market deals with only fruits and the sample respondents include 16 commission agents, 18 retailers and 12 farmers. The number of commission agents in terms
interviewed in this study accounts for 19 percent, 26 percent and 13.3 percent of the total commission agents operating in these three markets respectively CJP, SP and Naroda. On an average day about 100 farmers and 300 traders (retailers) take part in onion and potato trade at the Sardar Patel Market, 60 to 70 farmers and 300 retailers take part in vegetable trade in the CJ Patel Market. In the Naroda Fruit Market the average number of farmers and traders take part in the marketing of fruits is respectively about 8 to 10 and 300. The vegetables which were selected in the Ahmedabad markets for the sample survey were potato, onion, tomato, cabbage, cauliflower, brinjal, green-pea and lady's finger and the selected fruits were mango, apple, sapota, banana, sweet orange, pineapple and pomegranate. The selection of these commodities was based on their importance in terms of their volume of Table 1.1: Details of Samples Selected for the Study from Ahmedabad, Chennai and Kolkata Markets Market Other Intermediary Wholesaler/ Commission Agent
Retailer
Farmer
Ahmedabad CJ Patel Market Sardar Patel Market Naroda Fruit Market Total Chennai1 Koyambedu Wholesale Market(KFVWM) Ambattur Uzhavar Sandhai(AUS) Total
26 21 12 59
30 30 16 76 63
28 30 18 76 37 37
84 81 46 211 100 20 120
20 20
63
Kolkota S.S.Hogg Market 4 2 4 10 Posta Market 4 2 4 10 Mechua Fal Patty 4 2 4 10 Total 12 6 12 30 1 Out of the 63 wholesales-cum-commission agents, 32 deals with vegetables and the rest fruits. Similarly out of 37 retailers, 18 deals with vegetables and the rest 19 deals with fruits. All the 20 farmers deal with vegetables only.
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sale in the Ahmedabad wholesale markets. From Chennai two wholesale markets were selected for the detailed study. The vegetables selected from these markets were brinjal, lady's finger, onion, potato, cabbage, cauliflower and tomato, and the fruits selected were mango, apple, sapota, banana, sweet orange (sathukudi) pineapple and pomegranate. There are no regulated markets in Kolkata City. The markets there are controlled by the local municipal marketing authorities. There are 20 wholesale markets in the Kolkata City controlled by the Kolkata Municipal Corporation. Among them six markets deal exclusively with fruits and vegetables. Three markets out of these six have been selected for the present study. The vegetables selected for study in the Kolkota markets were potato, brinjal, lady's finger (okra), cabbage, cauliflower, and tomato, and the fruits selected were mango, pineapple and banana.
2. Overview of Fruit and Vegetable Economy of India

This section gives a brief account of fruits and vegetables economy of India. This is examined in terms of the production and productivity of major fruits and vegetables at the national level as well as in various states. This is followed by a brief account of the present marketing practices that are followed in various parts of the country. 2.1 Fruits and Vegetables Production in India India now ranks first in the world in the combined production of fruits and vegetables. Out of 370 million tons of fruit production in the world, India accounts for 30 million tons. Of the 450 million tons of vegetables produced in the world, India produces as much as 59 million tons and so India's share in the world's vegetable market is 17 per cent. The horticultural crops in the country presently covers 13.6 million hectares of land, i.e. 7 per cent of the gross cropped area and contributes 18-20 per cent of the gross value of India's agricultural output. India is the largest producer of mango and banana in the world and has fifth position in the production of pineapple and sixth in the production of orange, tenth in the production of apple (Table 2.1). Among major vegetables, India occupies the first position in cauliflower and brinjal production, second in onion, third in cabbage, and sixth in potato in the world. The diverse soil and climatic conditions in the country makes it possible to cultivate a wide variety of fruits and vegetables in various parts of the country. The total area, production
and yield per hectare and the share of area under fruits in gross cultivated area in different states are shown in Table 2.2. The importance varies substantially from state to state. Table 2.1: Production of Major Fruits and Vegetables: India's Position in the World, 1996 Sr. No. 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8 Fruits/ Vegetables Fruits Mango Banana Apple Pineapple Papaya Orange Grapes Lime Vegetables Tomato Onion Brinjal Potato Green Peas Cabbage Cauliflower Garlic Production (000 MT) India World 10000 15073 1200 820 490 2000 1083 1700 4800 4058 8026 17942 270 3300 4800 350 19215 55787 53672 11757 5867 59558 5004 9104 84873 36544 11981 294834 5214 46656 12725 10401 India's Share 52.0 27.0 2.2 7.0 8.4 3.4 21.6 18.7 5.7 11.1 67.0 6.1 5.2 7.1 37.7 3.4 India's Rank 1 1 10 5 4 6 8 1 6 2 1 6 5 3 1 3
Source: Horticultural Statistics, 1999, Department of Horticulture, Chennai and http://www. Postharvestindia.com/indhrvst/fruits.htm
In Himachal Pradesh and in the North Eastern states fruits account for a significant share in their gross cultivated area. They are traditionally dominant in fruit cultivation due to favourable agro-climatic conditions. The yield per hectare of fruits varied from 0.4 MT in Himachal Pradesh to 25.6 MT in Tamil Nadu with a national average of 12 MT. Large variation observed in the yield levels in different states could be mainly attributed to the prevailing soil and climatic conditions besides the varieties of fruits grown.
Table 2.2 : Area, Production and Yield of Fruits in various States in India, 1999-2000 Area under Fruits as percent of Gross Cultivated Area 1 Himachal Pradesh 196.6 87.5 0.4 20.23 2 Arunachal Pradesh 44.1 93.1 2.1 17.64 3 Jammu and Kashmir 133.0 1021.0 7.7 12.28 4 Manipur 24.6 118.1 4.8 11.88 5 Mizoram 13.0 40.7 3.1 11.50 6 Meghalaya 26.9 223.3 8.3 10.72 7 Nagaland 19.4 232.3 12.0 7.46 8 Goa 12.3 99.0 8.0 7.28 9 Tripura 30.4 372.1 12.2 6.67 10 Kerala 187.8 1184.5 6.3 6.33 11 Sikkim 5.9 8.6 1.5 4.15 12 Andhra Pradesh 449.2 5175.4 11.5 3.70 13 Tamil Nadu 232.0 5939.6 25.6 3.54 14 Bihar 309.3 3870.7 12.5 3.09 15 Kanataka 315.0 5456.1 17.3 2.69 16 Assam 106.1 1247.1 11.8 2.66 17 Maharastra 539.8 8688.5 16.1 2.48 18 Orissa 204.9 1202.9 5.9 2.37 19 Gujarat 176.2 2376.0 13.5 1.66 20 West Bengal 130.2 1816.1 13.9 1.41 21 Uttar Pradesh 315.1 3210.5 10.2 1.19 22 Haryana 28.6 212.0 7.4 0.47 23 Punjab 30.1 418.6 13.9 0.37 24 Madhya Pradesh 67.4 1536.1 22.8 0.26 25 Rajasthan 20.0 339.3 17.0 0.09 All India 3796.8 45496.0 12.0 1.99 Source: Horticultural Statistics, 1999, Department of Horticulture, Chennai and http://www. Postharvestindia.com/indhrvst/fruits.htm The vegetable cultivation in the country today spread over 7 million hectares which accounts for about 3.14 percent of the gross cultivated area in the country. In West Bengal, Orissa, Bihar as well a the north eastern states vegetables accounted for over 5 percent of the gross cultivated area while in other states it varied from 0.4 percent in Rajasthan to 4.5 percent State Area (000 ha) Production (000 MT) Yield (MT/ha)
in Goa. The yield per hectare of vegetable varied from around 4.5 MT in Mizoram to 27.1 MT in Tamil Nadu with a national average of 15.2 MT (Table 2.3). Total area, production and yield of fruits and vegetables in the three states, where the selected three cities belong, are shown in Table 2.4. In both Gujarat and West Bengal area under vegetables were more than that of area under fruits and in West Bengal area under vegetables was almost 8 times that of area under fruits. These three states together account for over 14 percent of the total area and 22 percent of total production of fruits in the country. The share of these states is over 25 percent in area and 28 percent in production of vegetables in the country. The yields of fruits and vegetables in these states were above the national average except for vegetables in Gujarat. While fruits accounted for 1.7 percent of the gross cultivated area in Gujarat and 1.4 percent in West Bengal, this was 3.54 percent in Tamil Nadu. While vegetables accounted for 12.2 percent of the Gross cultivated area in West Bengal, this was 3.2 percent in Tamil Nadu and 1.9 percent in Gujarat. 2.2 Fruit and Vegetable Marketing Marketing of horticultural crops is quite complex and risky due to the perishable nature of the produce, consumer, seasonal production and bulkiness. The spectrum of prices from producer to which is an outcome of demand and supply of transactions between various
intermediaries at different levels in the marketing system, is also unique for fruits and vegetables. Moreover, the marketing arrangements at different stages also play an important role in price levels at various stages viz. from farm gate to the ultimate user. These features make the marketing system of fruits and vegetables to differ from other agricultural commodities, particularly in providing time, form and space utilities. While the market infrastructure is better developed for foodgrains, fruits and vegetables markets are not that well developed and markets are congested and unhygienic (Sharan, 1998). The markets in many of the major cities in some states are not covered by market legislation and continue to function under civic body as well as private ownership.
Table 2.3 : Area, Production and Yield of Vegetables in various States, 1999-2000 Area under Area Production Yield Vegetables as State percent of Gross (000 ha) (000 MT) (MT/ha) Cultivated Area 1 West Bengal 1122.3 17413.8 15.5 12.19 2 Meghalaya 29.2 252.9 8.7 11.63 3 Orissa 788.1 9096.0 11.5 9.12 4 Nagaland 20.9 235.7 11.3 8.04 5 Mizoram 8.3 56.3 6.8 7.35 6 Sikkim 9.6 43.0 4.5 6.76 7 Arunachal Pradesh 16.9 80.9 4.8 6.76 8 Assam 255.9 3089.4 12.1 6.41 9 Bihar 626.0 9548.8 15.3 6.25 10 Kerala 159.7 2857.1 17.9 5.38 11 Goa 7.6 70.0 9.2 4.50 12 Manipur 9.0 60.8 6.8 4.35 13 Himachal Pradesh 40.6 660.9 16.3 4.18 14 Tripura 18.4 232.8 12.7 4.04 15 Jammu and Kashmir 41.4 584.3 14.1 3.82 16 Tamil Nadu 209.1 5660.3 27.1 3.19 17 Karnataka 361.6 6796.9 18.8 3.09 18 Uttar Pradesh 688.9 13842.4 20.1 2.60 19 Haryana 135.0 2094.5 15.5 2.20 20 Andhra Pradesh 230.1 2839.1 12.3 1.90 21 Gujarat 201.0 2647.0 13.2 1.89 22 Maharastra 385.3 4828.6 12.5 1.77 23 Punjab 135.4 2285.0 16.9 1.68 24 Madhya Pradesh 258.7 3632.0 14.0 0.99 25 Rajasthan 98.7 472.6 4.8 0.44 All India 5993.0 90830.7 15.2 3.14 Source: Horticultural Statistics, 1999, Department of Horticulture, Chennai and http://www. Postharvestindia.com/indhrvst/fruits.htm
Table 2.4 : Area, Production and Yield of Fruits and Vegetables in Selected States during 1999-2000 Area 000ha, Production 000 MT Percentage to All India and Yield MT/ha Gujarat Tamil West All India Gujarat Tamil West Nadu Bengal Nadu Bengal Fruits Area 176.2 232.0 130.2 3797 4.64 6.11 3.43 Production 2376.0 5939.6 1816.1 45496 5.22 13.06 3.99 Yield 13.5 25.6 13.9 12.0 112.50 213.33 115.83 Vegetables Area 201.0 209.1 1122.3 5993 3.35 3.49 18.73 Production 2647.0 5660.3 17413.8 90831 2.91 6.23 19.17 Yield 13.2 27.1 15.5 15.2 86.84 178.29 101.97 Source: Horticultural Statistics, 1999, Department of Horticulture, Chennai and http://www. Postharvestindia.com/indhrvst/fruits.htm Item
Some studies have shown that producers share in consumers rupee is comparatively lower for perishable crops(Saikia, 1985, Singh M, 1985). This could be due to a variety of factors such as number of intermediaries, cost of various market functions rendered by intermediaries, spread of location of the producers and consumers. Further the degree of perishability, variety and quality, and various market imperfections, market infrastructure etc also influence the marketing costs and price levels. Producers share was found to be relatively high in areas where better infrastructure facilities for marketing were made available. Some studies have cited examples of an improvement in producers share over a period of time due to improvement in market infrastructure, such as cold storage facilities. On the other hand the low share of consumers rupee for potato growers in different parts of the country may be due to high margins of intermediaries. Producers share was also often varies during peak and lean seasons (Subbanarasaiah, 1991). Substantial variation in producers share in consumers rupee for fruits and vegetables was also observed even in the same location itself (Garg and Misra, 1976). In many locations for fresh fruits and vegetables regulated markets are the first destination. Growers send their produce daily to these markets for sale and traders and retailers
buy them for the consumers. Fruits and vegetables arrive from far off places follow different marketing systems. It was also found that the regulated markets benefited farmers in proportion to the effectiveness with which market committees supervise the trading of fruits and vegetable marketing. These findings advocate effective implementation of regulatory measures, improved market infrastructure, and dissemination of market information that could not only improve the marketing of fruits and vegetables but also the share of producers in consumers rupee. Agricultural marketing continued to be plagued by many market imperfections such as inadequate infrastructure, lack of scientific grading system, defective weightment and so on. The basic objective of regulating the marketing of agricultural products was to bring both producer and buyer/trader closer and to the same level of advantage. This would help reduce middlemen and associated costs and margins. Moreover regulated markets are the platform for both producers and buyers to represent their grievances and discuss matters of mutual interest. Market legislation in India covers almost all agricultural commodities. Since regulation of markets is a state subject, the regulatory measures adopted by various states differ though marginally. There are as many as 4000 regulated markets in the country dealing with fruits and vegetables trade. While the market regulation has been successful in some areas to certain extent, it has not often achieved the objectives to the desired level. A large number of wholesale markets, are yet to be brought under the purview of market legislation. Regulating markets are only the first step to improve the marketing efficiency. Past studies on regulated markets in various parts of the country brought out various inadequacies in the system in terms of their functioning, infrastructure, price realized by farmers and so on. Grading, providing price information at different markets etc. have been neglected by few regulated markets. Few other problems identified are lack of standardised price quotations, disparities in rate of market fees. In some cases it was found that the traders and not the farmers obtained the benefit of the regulated markets. In few regulated markets there were very few traders and hence enough healthy competition was not there and eventually low prices were realised by the farmers. Even in more competitive regulated markets, the market were often not stable. In a study on fruits and vegetable wholesale market in Ahmedabad, the most striking aspect observed was congestion and crowding during business hours. Though the
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produce remained only for a few hours in the market significant mechanical damage and contamination can occur in the course of loading, unloading and handling (Sharan, 1998). All these evidences suggest that there is large scope for improving various aspects of fruits and vegetables marketing in the country.
3. Market Infrastructure, Marketing Practices and Patterns

This section examines various aspects of the present marketing practices, market infrastructure and other related aspects of the selected fruits and vegetable markets. While there are several regulated wholesale markets for fruits and vegetables in the Ahmedabad City, no such regulated wholesale markets were reported for fruits and vegetable marketing in Chennai and Kolkata cities. Thus, the sample covered in this study includes both regulated and non-regulated markets. 3.1 Introduction to the selected Markets Before the establishment of regulated markets in Ahmedabad, wholesale trade in fruits and vegetables was largely controlled by a few traders. Unfair and exploitative practices were common at that time and the market efficiency was very low. Since the establishment of Market Committee in 1948 under the Market Regulation Act, a governing body consisting of representatives of licensed commission agents, farmers, traders, co-operatives and the government have gradually taken control of supervising the fruits and vegetables wholesale trade. This Committee is known as the Agricultural Produce Marketing Committee (APMC) and it controls and administers the regulated markets. Members of this Committee include farmers, traders, cooperative marketing societies, cooperative/commercial banks, officials of local bodies and the government. As of today there are three wholesale market yards in Ahmedabad City for fruits and vegetables administered by the APMC. This study covers all these three markets viz., the Sardar Patel market, outside Jamalpur Gate, Paldi; the Chimanbhai Jivabhai Patel Market Yard at Vasna Octroi Naka; and the Naroda fruit market, Naroda. These wholesale market yards began functioning from 1980, 1996 and 1998 respectively. In Chennai, there is no regulated wholesale market for fruits and vegetables. Two wholesale markets were selected for the study. They were Koyambedu Fruits and Vegetable Wholesale Market (KFVWM), which is situated at the outskirts of the city, and Ambattur Farmer's Market (AUS) popularly known as Ambattur Ezhawar Sandhai. The Chennai 11
Metropolitan Development Authority promoted the KFVWM in 1996. The AUS is relatively new and small market and was established only in the year 2000. In Kolkata too there is no regulated wholesale markets for the sale of fruits and vegetables. There are six wholesale markets in Kolkata City where only vegetables and fruits are handled, and three markets out of them were selected for the study. They are S.S.Hogg Market for vegetables, Posta Market for potato and onion, and Mechua Fal Patty Market for fruits. Besides these wholesale markets, three retails markets namely Ashu Babur Bazar, ABAC Market and Ananth Nath Deb Bazar were also selected for the study. 3.2 Management of the Selected Markets The Agricultural Produce Marketing Committee, which controls the Ahmedabad market, consists of 17 members: 8 agriculturists, 4 traders, 2 Government nominees, and 2 members belonging to the cooperative societies and one from the elected local administration. The term of office of the market committee is 4 years and term of the chairman is 2 years. There are also a number of sub-committees for licensing, budget, sanitary, canteen, seasonal agricultural produce, disputes and so on. The representation of farmers, traders and various other related organisations in the APMC enables all participants to represent their grievances, make suggestions to improve the functioning of regulated markets. In Chennai the Market Management Committee headed by the Chief Administrative Officer of the Chennai Metropolitan Development Authority (CMDA) controls the KFVWM. The members of the Committee include the Commissioner of Chennai Corporation, the Chief Planner, Director of Agricultural Marketing, MLA of the constituency where the market is located, and three wholesale traders from the market. The committee is selected for a 3-year term. At present the staff of CMDA are deputed to the Committee and their salary is being paid by the CMDA. There are three types of staffs working in the Management Committee, namely technical, non-technical and ministerial. Apart form these there are driver, typists etc. working on daily wage basis. The Amabattur Farmer's market (AUS) is under the control of the Secretary, Kancheepuram Market Committee. The number of persons working at the market yard includes one agricultural officer, one assistant, a sweeper and 3 security staff on shift basis. In West Bengal there is a three-tier marketing structure with primary, secondary and terminal markets. Most of the markets are integrated complexes with grading, packaging and 12
storage facilities. Single commodity markets are non-existent. As mentioned above, in the Kolkata City there are no regulated markets for the sale of fruits and vegetables and all these markets are controlled by the Municipal Corporation and the Government of West Bengal. No other details about the management of these markets are available. The year of establishment, plot size and the number of licensed traders operating in the three market yards in Ahmedabad and the two market yards in Chennai are given in Table 3.1. Total registered commission agents, who predominate the licensed traders, in Ahmedabad markets are respectively 159, 115 and 120. The presence of co-operative societies was only 3 and 2 respectively in the Sardar Patel and CJ Patel market yards and in the Naroda fruit market there was no representative of cooperative societies. The CJ Patel Market is the largest in plot size amongst the three, but has fewer numbers of licensed traders and staff. This is mainly because they deal with only two commodities namely potato and onion.The number of commission agents who have registered (or renewed their licenses) during the 1999-2000 were respectively 162, 117 and 120 in the SP, CJP and Naroda fruit markets.
Table 3.1: Year of Establishment, Size of Market Yard and Licensed Traders in the selected Markets Number of licensed traders Plot size (Sq. Commissio Co-op. Others Yds) n Agent Soc. Ahmedabad Sardar Patel Market 1980 16000 159 3 C J Patel Market 1996 50000 115 2 3 Naroda Fruits Market 1998 22577 120 Chennai Koyambedu Market 1996 77 acres Ambattur Market 2000 0.86 acres Note: The above information is not available for the Kolkata markets Market Year of Establish ment 3.3 Market Infrastructure Various infrastructure facilities available in the selected market yards can be briefly discussed as follows. In CJ Patel market yard there are 120 stalls each measuring 40x20 feet 13 Office Staff 33 10 9
and 19 shops measuring 20x10 feet each. These stalls are meant for the wholesale trade in potato and onion, and the 19 shops are meant for the sale of agricultural inputs such as seeds, fertilizers and other related agricultural inputs. This market yard is well connected with internal roads: 70 feet wide roads for trade traffic and 30 feet road for private traffic. The market yard is also equipped with a private telephone exchange. There are 3 big gates in the market yard and two of them are for entry and one for exit purposes. The administrative block which houses offices for the stall holders, toilet facilities for general public and stall visitors and canteen facilities. This market is by far the most modern amongst the three market yards for fruits and vegetable trade in Ahmedabad city, and also has a variety of other features, such as conference hall, garden, fountain, kiosk systems, VIP guest-house and internet facility. But what are lacking in this market yard are cold storage and general go-down facilities. Though general godown facility is not reported as very important by the market functionaries (officials), cold storage facility is indicated as very important, and perhaps would be an excellent addition to the infrastructure of the market. The facilities such as internal roads, streetlight, water supply and sanitary facilities etc are reported as very important by the functionaries. Among the other facilities that are available and considered important by the market officials are rest house for farmers, watchmen, first-aid facilities, banking services and telephone facilities. The Sardar Patel market is the oldest of the three markets, and is also the main office of the APMC. It has 94 stalls each measuring 42.5x12 feet meant for the commission agents. There are 55 ring stalls functioning in a common shed having an area of 16000 square feet and is used for general commission agent. In addition, there are 32 stalls used for the sale of agricultural inputs and other household items. There are five gates, two each for entry and exit and one for emergency purposes. There are wide roads connecting the market yard from the north and south Gujarat. This market also does not have any cold storage facility or a general go-down, but has almost all other facilities available at the CJP Market. Naroda Fruits Market is well connected with wide road to the Ahmedabad City and DelhiMumbai Road (NH No.8). There are 60 stalls for Commission Agents and 27 stalls for semi-wholesalers and retailers. All the stalls are under private ownership and the APMC has only the administrative control on trading activities. Very few farmers from Gujarat or from other states bring their produce in this market. Fruits generally come here from various parts
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of the country through the local traders and commission agents. This market does not have any other facilities except a market office, and internal roads. This market yard has been under private ownership, and only recently the APMC took over. There are 2344 shops in the Chennai KFVWM, out of this 456 deal with fruits, 1468 stalls with vegetables, 300 stalls with flowers and the rest are lying idle. Merchants own these shops and some are rented out to small traders. Apart from the stalls there are internal roads, service shops and restaurants. The traders operating in these stalls have to obtain license from the committee by paying a prescribed fee of Rs.150 per year and a renewal license fee of Rs.75 per year for three years. Besides maintenance fee of Re.1 per square feet per month is also collected from the traders. There are six vegetable go-downs and one cold storage. There is a bus stand for transportation of commodities, pay and use sanitary facilities, night shelters for workers. The telephone booth in the market has telex, fax and STD facilities, and a fire station outside the market yard. There is a cooperative bank branch as well as a branch of nationalized commercial bank besides a post office. In the AUS market there are 100 shops each measuring 10' x 8' and the producerfarmers are allotted these shops on first come serve basis. No market fee is levied on them. The market is under the control of Kancheepuram Market Committee. The salient features of this market are: it is situated on the Chennai-Thirupathy highway, it is equipped with telephone facilities, there are stalls run by self-help groups, canteen facilities and facilities for waste disposals which is converted into bio-fertilizers. Weighing machines are provided to the farmers free of cost, and there are electricity and water facilities. There is no license or market fee or entry fee. No such details are available for the Kolkata markets. Study of the market infrastructure in the selected fruits and vegetable markets indicates that the Ahmedabad regulated markets are well equipped but handicapped with the non-availability of general godown and cold storage facilities. 3.4 Market Charges The prevailing rates of commission, market fees etc. in Ahmedabad markets are given in Table 3.2. The rate of commission, currently at 6 per cent of the value of produce, and the market fee, that is at the rate of 0.5 per cent, are charged from the purchaser. While the
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commission amount goes to the trader, the market fee accrues to the APMC. The only exception is that if the seller is from outside the state of Gujarat, the market fee is to be paid by the seller. Apart from these, the APMC also collects funds through other charges, such as weighman charges, carting charges, marfat and recording charges. The weighman charges vary depending on the kind of vegetable or fruit in question. The carting charges also vary depending on the station from where the carting is being made. For Chennai and Kolkata, these cost details are not available. 3.5 Sources and Uses of Funds Table 3.3 shows the sources and uses of funds of APMC. The total annual earnings from the three markets to APMC amount to Rs. 272 lakh during the triennium ending 19992000. In the earnings of APMC from the three markets, the largest contribution was from the Sardar Patel Market (46 percent) followed by the CJP Market (38 percent) and lastly the Naroda Fruit Market (16 percent). Among its various sources of income, the market fee dominates at 74 percent in CJP Market, 93 percent in SP Market and 97 percent in Naroda Fruit Market. Income from stall fee was at 20 percent from the CJP Market and 7.5 percent from the SP Market (7.5 percent). Other sources of income, which are of insignificant, are in the form of entry fee, parking fee and canteen fee. Among these three markets in Ahmedabad, the highest expenditure was reported by the CJP Market, followed by the SP Market, and then the Naroda Fruit Market. The expenditure pattern in the CJP Market showed that the largest share in total expenditure (50.3 per cent) is on electricity followed by 27.7 per cent on salary. In the case of the SP Market, the salary constitutes 47.4 per cent of the expenditure, followed by 35.1 per cent for electricity. In the case of Naroda Fruits Market, 56.6 per cent of the total expenditure goes towards salary, followed by 15.4 per cent for rent. Cleaning expenses are also high in the Naroda Fruit Market, and amount to 13.7 per cent. The total expenditure of APMC in three markets together amounts to Rs. 36.2 lakhs. Thus the sources and uses of funds by the APMC indicated that the excess of income over expenditure is very substantial and therefore excellent viability of the markets.
16
Table 3.2: Rate of Commission/Market Charges at the APMC, Ahmedabad Particulars Commission Charge Market Fee Weighman Charges (Unloading & Tolai) Green & Leafy Vegetable Tomato / Fruits Potato / Onions From B.G. Station to Market Yard From M.G. Station to Market Yard Marfat Goods Train Passenger Train Recording Charges Source: Same as in Table 3.1 Rate (Rs.) 6.00 0.50 1.00 2.00 2.50 1.00 1.75 2.50 1.00 0.80 1.20 1.00 0.05 0.10 0.01 Unit Rs. 100 Rs. 100 Upto 30 Kg. 31 Kg to 60 Kg 61 kg & above One box Small bag Big bag Big bag Small bag Big bag Small bag One bag One bag One bag Recoverable from Purchaser Purchaser Purchaser Purchaser Purchaser Purchaser Purchaser Purchaser Purchaser Purchaser Purchaser Purchaser Purchaser Purchaser Purchaser
The sources of funds of the KFVWM consist of entry fee, registration fee, license fee, maintenance fee from the shops, collection from toilets, and rent received from the godowns. The major heads under which funds are being utilized are electrical and civil maintenance, cleaning, and advertisement. Other details are not available for Chennai and Kolkata markets. 3.6 Market Arrival/Sale of Fruits and Vegetables A brief account of the sale/market arrival of vegetables and their average prices during 1949/50 to 1998/99 in the Ahmedabad wholesale markets is given in Table 3.4. The sale/arrival of vegetables in the Ahmedabad market yards have increased from a low of 52 thousand tonnes in 1949/50 to nearly 700 thousand tonnes by late nineties. The average nominal prices also show a many fold increase viz., from Rs.25 per quintal to Rs.552 per quintal. While the growth in market arrival/sale was very modest in the 1960s and 1970s, high growth in market arrival/sale was observed during 1980s and 1990s.
17
Table 3.3 : Sources and Uses of Funds of the Marketing Committee in APMC, Ahmedabad Markets
Sources of Funds Average for 199798 to 1999-2000 Percent age Uses of Funds Average for 1997-98 to 1999-2000 529,705.52 961,084.67 190,459.00 130,536.73 64,483.00 50,162.00 1,909,710.26 755,404.13 558,664.58 53,805.50 135,171.82 86,396.00 6,099.00 1,593,508.04 Percent age
CJ Patel Market
1. License Fee 2. Market Fee 3. Stall Fee 4. Rent for open space 5. Vehicle Entry Fee 6. Canteen Fee Total Income 27,483.33 6,398,959.79 1,750,003.52 72,630.83 420,036.00 35,000.00 8,692,446.81 32,950.00 11,529,139.85 930,603.33 44,200.00 659,208.33 Average 69,625.25 31,000.00 143,084.95 12,358,575.15 24,066.67 5,998,142.03 175,151.83 14,000.00 6,000.00 6,210,693.86 0.32 73.62 20.13 0.84 4.83 0.40 100.00 0.27 93.29 7.53 0.36 5.33 Percent age 0.56 0.25 1.16 100.00 0.39 96.58 2.82 0.23 0.10 100 1.Salary 2. Electric Exp. 3. Municipal Tax 4. Maintenance Exp. 5. Cleaning Exp. 6. Land Revenue Total Expenses 1. Salary 2. Electric Exp. 3. Municipal Tax 4. Maintenance Exp. 5. Cleaning Exp. 6. Land Revenue Total Expenses 27.74 50.33 9.97 6.84 3.38 2.63 100.00 47.41 35.06 3.38 8.48 5.42 0.38 100.00
Sardar Patel Market

1. License Fee 2. Market Fee 3. Stall Fee 4. Cleaning Fee 5. Vehicle Entry Fee 6. Sources of Funds 7. Parking Fee 8. Canteen Fee 9. Electric Charge Total Income
Naroda Fruits Market:

1. License Fee 2. Market Fee 3. Vehicle Entry Fee 4. Parking Fee 5. Canteen Fee 6. Total Income 1. Rent 2. Salary 3. Electric Exp. 4. Maintenance Exp. 5. Cleaning Exp. Total Expenses 135,000.00 496,795.53 44,036.50 82,687.54 119,991.40 878,511.64 15.37 56.55 5.01 9.41 13.66 100.00
Table 3.5 and Figure 3.1 show the market arrival of major vegetables in the Ahmedabad regulated market yards during 1999-2000. The APMC records the market arrival of 35 commodities. Among them Potato holds the top position in terms of sale/market arrival followed by onion and tomato. Their market arrival during 1999-2000 was respectively 207, 124 and 65 thousand tonnes. Among other major vegetables whose sale/market arrival that are recorded by APMC are cabbage, cauliflower, green-chillies, brinjal, ginger, green-pea and lady's finger. Table 3.6 and figure 3.1 and 3.2 gives the data on sale/market arrival of fruits in the Naroda regulated market yard where 24 different types of fruits are recorded. In terms of
18
quantity handled, the top most positions are occupied by mango (55.5 thousand tonnes), apple (45.1 thousand tonnes) followed by green-coconut, sweet orange, pineapple, sapota and pomegranate. Although banana is one of the major fruits consumed in the Ahmedabad city area, but only a small quantity is traded through the regulated market yard and hence it ranks only 13th among the 24 fruits of which sale/arrival have been recorded. These details are not available for the Chennai and Kolkata markets. Table 3.4: Market Arrival & Average Price of all Vegetables in APMC, Ahmedabad Markets, 1949-50 to 1998-99 Year 1949-50 1950-51 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 Arrivals (Quintals) 521,242 541,424 563,140 635,600 654,790 647,377 647,899 775,739 804,809 823,623 890,106 878,072 937,546 1,064,766 1,067,500 1,171,600 1,358,133 1,272,451 1,367,884 1,360,520 1,385,937 1,474,587 1,705,790 1,900,555 1,905,429 1,900,921 1,801,757 Average rate (Rs./Qtl.) 25.00 25.00 28.50 25.00 21.00 21.50 23.00 23.50 24.00 27.00 28.00 29.50 31.62 30.50 37.25 39.41 42.50 50.50 43.60 45.05 55.00 50.90 60.00 60.00 70.00 78.00 74.00 Three year Moving Average Arrival (Quintal) 541,935.33 580,054.67 617,843.33 645,922.33 650,022.00 690,338.33 742,815.67 801,390.33 839,512.67 863,933.67 901,908.00 960,128.00 1,023,270.67 1,101,288.67 1,199,077.67 1,267,394.67 1,332,822.67 1,333,618.33 1,371,447.00 1,407,014.67 1,522,104.67 1,693,644.00 1,837,258.00 1,902,301.67 1,869,369.00 Three Year Moving Average Price 26.17 26.17 24.83 22.50 21.83 22.67 23.50 24.83 26.33 28.17 29.71 30.54 33.12 35.72 39.72 44.14 45.53 46.38 47.88 50.32 55.30 56.97 63.33 69.33 74.00
19
Table 3.4 contd Year Arrivals (Quintals) Average rate (Rs./Qtl.) Three year Moving Average Arrival (Quintal) 1,904,733.00 1,950,109.67 2,046,129.67 2,199,664.33 2,414,851.33 2,752,706.33 3,009,758.67 3,283,422.33 3,294,913.67 3,465,547.33 3,585,115.33 3,927,451.67 4,098,423.33 4,430,828.67 4,584,585.33 4,680,121.33 4,492,076.00 4,604,254.33 4,795,983.00 5,127,456.00 5,767,941.33 6,270,910.33 6,544,061.00 Three Year Moving Average Price 77.33 78.67 81.33 84.67 92.93 102.27 117.88 125.24 133.57 136.44 151.82 168.48 179.33 184.33 205.33 232.67 264.00 286.33 316.67 362.33 377.00 435.67 479.33
1976-77 2,011,521 80.00 1977-78 2,037,051 82.00 1978-79 2,089,817 82.00 1979-80 2,472,125 90.00 1980-81 2,682,612 106.80 1981-82 3,103,382 110.00 1982-83 3,243,282 136.85 1983-84 3,503,603 128.87 1984-85 3,137,856 135.00 1985-86 3,755,183 145.45 1986-87 3,862,307 175.00 1987-88 4,164,865 185.00 1988-89 4,268,098 178.00 1989-90 4,859,523 190.00 1990-91 4,626,135 248.00 1991-92 4,554,706 260.00 1992-93 4,295,387 284.00 1993-94 4,962,670 315.00 1994-95 5,129,892 351.00 1995-96 5,289,806 421.00 1996-97 6,884,126 359.00 1997-98 6,638,799 527.00 1998-99 6,109,258 552.00 Source: Based on data obtained from APMC
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Table 3.5: Arrival of different Vegetables in CJP and SP Market Yards of Ahmedabad (1999-2000) (Quintals) Quantity Vegetables 1. Potato 2,069,080 2. Onion 1,236,773 3. Tomato 648,675 4. Cabbage 307,023 5. Cauliflower 200,823 6. Brinjal 170,620 7. Green pea 132,089 8. Lady's fingers 102,842 9. Green Chillies 260,062 10. Ginger 145,572 11. Giloda 91,944 12. Gavar 78,300 13. Cucumber 73,605 14. Gourd 70,488 15. Karela 51,700 16. Choli 48,560 17. Valor 43,034 18. Lemon 37,537 19. Bulbous root 37,248 20. Green Onion 30,820 21. Sweet potato 30,045 22. Tuver 25,324 23. Galka 16,715 24. Turiya 15,692 25. Parvar 10,788 26. Saragavo 10,618 27. Garlic (Green) 8,348 28. Tinsa 6,921 29. Fanasi 6,589 30. Yam 5,402 31. Pumpkin 5,158 32. Garlic (Dry) 3,795 33. Papdi 3,313 34. Mogari 3,285 35. Green tomato 1,272 Source: Based on data obtained from APMC Rank 1 2 3 4 6 7 9 10 5 8 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35
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Table 3.6: Arrival of different Fruits in the Naroda Market Yard in Ahmedabad (1999-2000) (Quintals) Fruits 1. Mango 2. Apple 3. Chiku 4. Banana 5. Mosambi 6. Pine-apple 7. Pomegranate 8. Green coconut 9. Grape 10. Pear (Naspati) 11. Berry (Bor) 12. Papaya 13. Orange 14. Water-melon 15. Rasbary Pluns 16. Alu Bukhara 17. Custard-apple 18. Guava 19. Babugosa 20. Cherry 21. Malberry 22. Strawberry 23. Fig 24. Musk-melon Source: Based on data obtained from APMC Quantity 555,381 451,169 136,177 11,872 175,729 151,231 132,742 255,366 64,600 49,178 31,268 22,641 17,682 9,345 6,183 5,150 4,471 1,610 1,363 886 450 158 51 22 Rank 1 2 6 13 4 5 7 3 8 9 10 11 12 14 15 16 17 18 19 20 21 22 23 24
22
F igure 3.1 : A rrival of S elec ted V egetab les in A h m edbad A P M C M arkets (19 99-2 000)
2 ,5 0 0 ,0 0 0
2 ,0 0 0 ,0 0 0 Quantity in Quintal
1 ,5 0 0 ,0 0 0
1 ,0 0 0 ,0 0 0
5 0 0 ,0 0 0
Po ta to
C ab ba ge
ni on
pe a re en
To m at o
C ol ifl
V e g e ta b le s
Figure 3.2: Arrival of Selected Fruits in APMC Markets (1999-2000) 600,000 500,000 Quantity in Quintal 400,000 300,000 200,000 100,000 0 Mango Apple Chiku Banana Mosambi Pine-apple Pomegranate
23
La dy 's
fin ge rs
ow er
Br in ja l
3.7 Monthly Sales Pattern of Selected Fruits and Vegetables This section examines the monthly sales/arrival pattern of selected vegetables and fruits in the selected markets. Fruits and vegetables sales are highly seasonal and this is accompanied with large fluctuation in their prices. The seasonality in the arrival/sale of the selected fruits and vegetables were examined with the help of monthly seasonal index. This index is arrived by expressing monthly sale/arrival of a given month to annual average sale/arrival per month expressed in percentage terms. The monthly sales pattern of selected vegetables in the Ahmedabad city markets are given in Tables 3.7 to 3.13 and Figures 3.3 and 3.4. Monthly sales/arrival pattern expressed in terms of monthly seasonal indices for potato and onion showed less variation over months except for potato while December and March showed a slightly higher volume of transaction compared to other months with monthly indices of 141.1 and 127.3. For onion, sale/arrival during the months of March and April were the peak months with the seasonal indices of 135 and 140.3 whereas August showed the least with 57. For tomato, while September, December and January are the peak months and July is the lean months with least amount of sales. But the sales of cauliflower and green-pea were largely confined to three to four months. Therefore, based on the monthly seasonal indices, variation in monthly sale/arrival, the selected vegetables could be grouped into three categories, viz. low, medium and high seasonality. While potato, onion, tomato and brinjal fall in the low seasonality category, cabbage and lady's finger fall in the medium seasonality category, and cauliflower and green-pea in high seasonality category. The monthly sales pattern of selected fruits in the Naroda Fruit Markets are given in tables 3.14 to 3.17 and figures 3.5 and 3.6. Among the selected fruits, mango shows extreme seasonality with 46 per cent of the annual sale during the month of May and 25 percent (monthly index of 308.5) during June. No sale is recorded from September to January. Similarly apple also show considerable seasonality, but lesser than mango. July to October is the peak months with a share of over 65 percent of the annual sales. High volume of sale in the case of banana was observed during August, September, and October but only a small share of total banana sold in the city is routed through the regulated market. The sale of sapota is fairly spread-out over all months except September, October and July. Similar is the case of Mosambi. While April to August are the lean months for the sale of pineapple, for pomegranate 24
Table 3.7 : Average Monthly Sale/Arrival of Onion and Potato in Ahmedabad CJP Market (Quantity in Quintals) Month October November December January February March April May June July August September Average Sale/ Arrival 100576 96962 120406 109747 90874 140568 146068 118962 95463 85073 59301 85324 104110 Onion Seasonal Index 96.6 93.1 115.7 105.4 87.3 135.0 140.3 114.3 91.7 81.7 57.0 82.0 100 Percent Share 8.1 7.8 9.6 8.8 7.3 11.3 11.7 9.5 7.6 6.8 4.7 6.8 100 Sale/ Arrival 134107 163886 207655 186317 149521 230097 157114 170957 147511 150669 126544 132327 163059 Potato Seasonal Index 82.2 100.5 127.3 114.3 91.7 141.1 96.4 104.8 90.5 92.4 77.6 81.2 100 Percent Share 6.9 8.4 10.6 9.5 7.6 11.8 8.0 8.7 7.5 7.7 6.5 6.8 100
Table 3.8: Average Monthly Sale/Arrival of Tomato and Cabbage in Ahmedabad SP Market ( Quantity in Quintals) Month October November December January February March April May June July August September Average Sale/ Arrival 53016 45841 73332 62150 51144 60247 57466 51703 49243 38911 67743 79411 57517 Tomato Seasonal Index 92.2 79.7 127.5 108.1 88.9 104.7 99.9 89.9 85.6 67.7 117.8 138.1 100.0 Percent Share 7.7 6.6 10.6 9.0 7.4 8.7 8.3 7.5 7.1 5.6 9.8 11.5 100 Sale/ Arrival 31100 31018 33068 39767 30183 28941 27764 22646 15013 15478 19597 34286 27405 Cabbage Seasonal Index 113.5 113.2 120.7 145.1 110.1 105.6 101.3 82.6 54.8 56.5 71.5 125.1 100.0 Percent Share 9.5 9.4 10.1 12.1 9.2 8.8 8.4 6.9 4.6 4.7 6.0 10.4 100
25
Table 3.9 : Average Monthly Sale/Arrival of Cauliflower and Brinjal in Ahmedabad SP Market (Quantity in Quintals) Month October November December January February March April May June July August September Average Sale/ Arrival 15921 23085 26724 31687 28719 31541 26697 8576 1501 2771 7696 10521 17953 Cauliflower Seasonal Percent Index Share 88.7 7.4 128.6 10.7 148.9 12.4 176.5 14.7 160.0 13.3 175.7 14.6 148.7 12.4 47.8 4.0 8.4 0.7 15.4 1.3 42.9 3.6 58.6 4.9 100.0 100 Sale/ Arrival 15285 17272 22419 20992 13537 15937 12561 10138 10039 12083 11600 12809 14556 Brinjal Seasonal Index 105.0 118.7 154.0 144.2 93.0 109.5 86.3 69.6 69.0 83.0 79.7 88.0 100.0 Percent Share 8.8 9.9 12.8 12.0 7.8 9.1 7.2 5.8 5.7 6.9 6.6 7.3 100.0
Table 3.10 : Average Monthly Sale/Arrival of Green Pea and Lady's Finger in Ahmedabad SP Market (Quantity in Quintals) Month October November December January February March April May June July August September Average Sale/ Arrival 555 5062 24562 30231 33798 29764 14050 2891 1595 407 593 306 11984 Green Pea Seasonal Index 4.6 42.2 204.9 252.3 282.0 248.4 117.2 24.1 13.3 3.4 5.0 2.6 100.0 Percent Share 0.4 3.5 17.1 21.0 23.5 20.7 9.8 2.0 1.1 0.3 0.4 0.2 100 Sale/ Arrival 11847 9202 5636 2060 2743 8665 11850 12320 10624 8355 9887 12385 8798 Lady's Finger Seasonal Index 134.7 104.6 64.1 23.4 31.2 98.5 134.7 140.0 120.8 95.0 112.4 140.8 100 Percent Share 11.2 8.7 5.3 2.0 2.6 8.2 11.2 11.7 10.1 7.9 9.4 11.7 100
26
Table 3.11 : Average Monthly Sale/Arrival of Cauliflower and Brinjal in Ahmedabad SP Market (Quantity in Quintals) Month October November December January February March April May June July August September Average Sale/ Arrival 15921 23085 26724 31687 28719 31541 26697 8576 1501 2771 7696 10521 17953 Cauliflower Seasonal Percent Index Share 88.7 7.4 128.6 10.7 148.9 12.4 176.5 14.7 160.0 13.3 175.7 14.6 148.7 12.4 47.8 4.0 8.4 0.7 15.4 1.3 42.9 3.6 58.6 4.9 100.0 100 Sale/ Arrival 15285 17272 22419 20992 13537 15937 12561 10138 10039 12083 11600 12809 14556 Brinjal Seasonal Index 105.0 118.7 154.0 144.2 93.0 109.5 86.3 69.6 69.0 83.0 79.7 88.0 100.0 Percent Share 8.8 9.9 12.8 12.0 7.8 9.1 7.2 5.8 5.7 6.9 6.6 7.3 100.0
27
Table 3.14 : Average Monthly Sale/Arrival of Mango and Apple in Ahmedabad Naroda Fruit Market (Quantity in Quintals) Month October November December January February March April May June July August September Average Sale/ Arrival 0 0 6 73 1036 4877 45180 203245 113222 64393 8421 0 36704 Mango Seasonal Index 0.0 0.0 0.0 0.2 2.8 13.3 123.1 553.7 308.5 175.4 22.9 0.0 100.0 Percent Share 0.0 0.0 0.2 1.1 10.3 46.1 25.7 14.6 1.9 100 Sale/ Arrival 36841 41113 30764 12143 10080 3812 2324 9527 11381 39549 87964 54100 28300 Apple Seasonal Index 130.2 145.3 108.7 42.9 35.6 13.5 8.2 33.7 40.2 139.7 310.8 191.2 100.0 Percent Share 10.8 12.1 9.1 3.6 3.0 1.1 0.7 2.8 3.4 11.6 25.9 15.9 100
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Table 3.15 : Average Monthly Sale/Arrival of Sapota and Banana in Ahmedabad Naroda Fruit Market (Quantity in Quintals) Month October November December January February March April May June July August September Average Sale/ Arrival 2450 6934 20439 12805 8822 8907 5646 10420 8560 4457 8331 4313 8507 Sapota Seasonal Index 28.8 81.5 240.3 150.5 103.7 104.7 66.4 122.5 100.6 52.4 97.9 50.7 100.0 Percent Share 2.4 6.8 20.0 12.5 8.6 8.7 5.5 10.2 8.4 4.4 8.2 4.2 100 Sale/ Arrival 1307 405 198 121 355 761 105 526 1116 1018 3282 2188 948 Banana Seasonal Index 137.8 42.7 20.9 12.8 37.4 80.3 11.0 55.4 117.7 107.3 346.0 230.7 100.0 Percent Share 11.5 3.6 1.7 1.1 3.1 6.7 0.9 4.6 9.8 8.9 28.8 19.2 100
Table 3.16 : Average Monthly Sale/Arrival of Sweet Orange and Pineapple in Ahmedabad Naroda Fruit Market (Quantity in Quintals) Month October November December January February March April May June July August September Average Sale/ Arrival 8051 5212 4684 12232 6261 4401 7086 9525 5238 8296 13155 14860 8250 Sweet Orange Seasonal Index 97.6 63.2 56.8 148.3 75.9 53.3 85.9 115.5 63.5 100.6 159.5 180.1 100.0 Percent Share 8.1 5.3 4.7 12.4 6.3 4.4 7.2 9.6 5.3 8.4 13.3 15.0 100 Sale/ Arrival 7595 11056 10318 8749 18398 9816 3543 1904 2351 2290 5068 6738 7319 Pineapple Seasonal Index 103.8 151.1 141.0 119.5 251.4 134.1 48.4 26.0 32.1 31.3 69.2 92.1 100.0 Percent Share 8.6 12.6 11.7 10.0 20.9 11.2 4.0 2.2 2.7 2.6 5.8 7.7 100
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Table 3.17 : Average Monthly Sale/Arrival of Pomegranate in Ahmedabad Naroda Fruit Market (Quantity in Quintals) Month October November December January February March April May June July August September Average Sale/Arrival 20073 23097 10362 7803 6934 3071 2066 5208 3924 10006 15516 11542 9967 Pomegranate Seasonal Index 201.4 231.7 104.0 78.3 69.6 30.8 20.7 52.3 39.4 100.4 155.7 115.8 100.0 Percent Share 16.8 19.3 8.7 6.5 5.8 2.6 1.7 4.4 3.3 8.4 13.0 9.7 100
Figure 3.4 : Indices of Monthly Sale of Vegetables in Ahm edabad City :1999-2000
300 250
Index Number
200 150 100 50 0
Month Cauliflower Brinjal Green Pea Lady's Finger
30
Au gu st Se pt em be r
be r
be r
ct ob er
ar ch
ay
ry Fe br ua ry
Ju ne
Ja nu a
Ap ril
N ov em
D ec em
Ju ly
Figure 3.3 : Indices of M onthly Sale of Vegetables in Ahm edabad City 1999-2000
160 140 120 100 80 60 40 20 0

O ct ob N ov er em D be ec em b Ja e nu a Fe ry br ua ry M ar ch A pr il M ay Ju ne Ju ly A ug Se ust pt em be
Month
Index Number
Onion
Potato
Tom ato
Cabbage
Figure 3.5 : Indices of M onthly Sale of Fruits in Ahm edabad City :1999-2000 600 500 Index Number 400 300 200 100 0
ct ob e ov r em D be ec em b Ja e nu a Fe ry br ua ry M ar ch A pr il M ay Ju ne Ju ly A ug Se ust pt em be N
M onth M ango Apple Sapota Banana
31
3 00
F re3.6: In s o M igu dice f onthlyS leo FruitsinA m da dC :19 a f h e ba ity 99 2 0 00
2 50
2 00 In de x 1 50 N u m be 1 00
5 0
0 a O be N ve be e m r Ja ua Fe ry M rch cto r o m rD ce be n ry brua A ril p My a Ju ne Ju A gu ly u st S pte be e m r
M onth
S e t O nge w e ra P a ine pple P m g na o e ra te
it was March to June. On the whole the variation in monthly sale of selected fruits were relatively high as compared to the selected vegetables in the Ahmedabad regulated markets. In Chennai, the sale of vegetables such as brinjal and lady's finger was evenly spread over rest of the period except December to March (Tables 3.18 to 3.20 and Figures 3.7 and 3.8). For potato and onion, it is during May, June and to certain extent July when the sales are relatively high as shown by the monthly seasonal indices (in the range of 129.5 to 202.2). Vegetables such as cabbage and cauliflower have also show more or less the same pattern. In general, therefore, in the Chennai markets, May to July shows higher sales and the sale is almost evenly distributed for the rest of the year. Compared to Ahmedabad and Chennai, the monthly sales pattern in the Kolkata wholesale market shows high seasonal variation except in the case of brinjal which shows a relatively even spread of sales over the months. In fruits, the other markets the monthly sales pattern is very much similar to that observed in Ahmedabad regulated markets.
32
Table 3.18 : Average Monthly Sale/Arrival of Brinjal and Lady's Finger In Chennai AUS Market (Quantity in Kgs.) Month January February March April May June July August September October November December Average Sale/ Arrival 8724 10263 10596 18730 32739 35809 25995 22369 17806 16587 20878 14036 19544 Brinjal Seasonal Index 44.6 52.5 54.2 95.8 167.5 183.2 133.0 114.5 91.1 84.9 106.8 71.8 100 Percent Share 3.7 4.4 4.5 8.0 14.0 15.3 11.1 9.5 7.6 7.1 8.9 6.0 100 Sale/ Arrival 6791 8843 13117 14321 23093 18859 15726 18443 19742 16663 19737 11930 15940 Lady's Finger Seasonal Index 42.6 55.5 82.3 89.8 144.9 118.3 98.7 115.7 123.9 104.5 123.8 74.8 100.0 Percent Share 3.9 5.0 7.5 8.2 13.2 10.8 9.0 10.5 11.3 9.5 11.3 6.8 100
Table 3.19 : Average Monthly Sale/Arrival of Potato and Onion in Chennai AUS Market (Quantity in Kgs.) Month January February March April May June July August September October November December Average Sale/ Arrival 2639 2767 2298 3869 7480 6390 5052 3688 3030 3739 3209 2642 3900 Potato Seasonal Index 67.7 70.9 58.9 99.2 191.8 163.8 129.5 94.6 77.7 95.9 82.3 67.7 100.0 Percent Share 5.6 5.9 4.9 8.3 16.0 13.7 10.8 7.9 6.5 8.0 6.9 5.6 100 Sale/ Arrival 4370 4002 4612 8074 17368 14810 12555 9829 5382 7427 6074 4547 8591 Onion Seasonal Index 50.9 46.6 53.7 94.0 202.2 172.4 146.1 114.4 62.6 86.4 70.7 52.9 100.0 Percent Share 4.6 4.2 4.9 8.5 18.4 15.7 13.3 10.4 5.7 7.9 6.4 4.8 100
33
Table 3.20 : Average Monthly Sale/Arrival of Cabbage and Tomato In Chennai AUS Market (Quantity in Kgs.) Month January February March April May June July August September October November December Average Sale/ Arrival 2477 2436 2732 3723 5462 4126 4037 3146 2426 3186 2912 2731 3283 Cabbage Seasonal Index 75.5 74.2 83.2 113.4 166.4 125.7 123.0 95.8 73.9 97.1 88.7 83.2 100.0 Percent Share 6.3 6.2 6.9 9.5 13.9 10.5 10.2 8.0 6.2 8.1 7.4 6.9 100 Sale/ Arrival 3707 1963 4024 6337 12105 8565 7720 5765 6120 5093 4409 4283 5841 Tomato Seasonal Index 63.5 33.6 68.9 108.5 207.2 146.6 132.2 98.7 104.8 87.2 75.5 73.3 100.0 Percent Share 5.3 2.8 5.7 9.0 17.3 12.2 11.0 8.2 8.7 7.3 6.3 6.1 100
Table 3.21 : Average Monthly Arrival of Potato and Tomato in Kolkata Market (Quantity in MT) Month Sale/ January February March April May June July August September October November December Average Arrival 10333 11982 11655 8975 8975 10248 10371 10089 9446 9006 10007 13544 10386 Potato Seasonal Index 99.5 115.4 112.2 86.4 86.4 98.7 99.9 97.1 91.0 86.7 96.4 130.4 100 Percent Share 8.3 9.6 9.4 7.2 7.2 8.2 8.3 8.1 7.6 7.2 8.0 10.9 100 Sale/ Arrival 6118 6038 5432 6022 6022 1612 3447 3153 3795 2762 3522 5296 4357 Tomato Seasonal Index 140.4 138.6 124.7 138.2 138.2 37.0 79.1 72.4 87.1 63.4 80.8 121.6 100.0 Percent Share 12.8 12.6 11.3 12.6 12.6 3.4 7.2 6.6 7.9 5.8 7.3 11.1 9.1
34
Table 3.24 : Average Monthly Arrival of Lady's Finger and Brinjal in Kolkata Market (Quantity in MT) Month January February March April May June July August September October November December Average Sale/ Arrival 0 0 1273 1225 1364 977 1249 1129 752 283 0 0 688 Lady's Finger Seasonal Percent Index Share 0.0 0.0 0.0 0.0 185.1 15.4 178.1 14.8 198.4 16.5 142.1 11.8 181.6 15.1 164.2 13.7 109.4 9.1 41.2 3.4 0.0 0.0 0.0 0.0 100.0 8.3 Sale/ Arrival 6929 5383 2833 2167 1918 1107 1263 1777 2030 1784 1560 3315 2614 Brinjal Seasonal Index 265.1 206.0 108.4 82.9 73.4 42.4 48.3 68.0 77.7 68.3 59.7 126.8 100.0 Percent Share 24.1 18.7 9.9 7.5 6.7 3.9 4.4 6.2 7.1 6.2 5.4 11.5 9.1
Table 3.25 : Average Monthly Arrival of Cabbage and Cauliflower in Kolkata Market (Quantity in MT) Month January February March April May June July August September October November December Average Sale/ Arrival 7565 5756 1179 292 289 840 2179 2646 2583 1561 2137 6139 2764 Cabbage Seasonal Index 273.7 208.3 42.7 10.6 10.5 30.4 78.8 95.7 93.5 56.5 77.3 222.1 100.0 Percent Share 22.8 17.4 3.6 0.9 0.9 2.5 6.6 8.0 7.8 4.7 6.4 18.5 8.3 Sale/ Arrival 5830 5031 1296 374 0 0 617 486 504 1881 2737 6166 2077 Cauliflower Seasonal Index 280.7 242.2 62.4 18.0 0.0 0.0 29.7 23.4 24.3 90.6 131.8 296.9 100.0 Percent Share 23.4 20.2 5.2 1.5 0.0 0.0 2.5 2.0 2.0 7.5 11.0 24.7 8.3
35
Table 3.26 : Average Monthly Arrival of Banana and Mango in Kolkata Market (Quantity in MT) Month January February March April May June July August September October November December Average Sale/ Arrival 7034 6342 4581 4655 4890 4686 4712 5042 4367 5206 6215 5131 5238 Banana Seasonal Index 134.3 121.1 87.5 88.9 93.3 89.5 90.0 96.3 83.4 99.4 118.6 97.9 100.0 Percent Share 11.2 10.1 7.3 7.4 7.8 7.5 7.5 8.0 6.9 8.3 9.9 8.2 8.3 Sale/ Arrival 0 0 0 0 7888 5129 10885 0 0 0 0 0 1992 Mango Seasonal Index 0.0 0.0 0.0 0.0 396.0 257.5 546.5 0.0 0.0 0.0 0.0 0.0 100.0 Percent Share 0.0 0.0 0.0 0.0 33.0 21.5 45.5 0.0 0.0 0.0 0.0 0.0 8.3
F igure 3.7: Indices of M onthly Sale of Vegetables in C hennai A U S M arket : 2000
250
200
Index Number
150
100
50
0
ay Fe br ua ry Ap ril Ju ly y Au gu st Se pt em be r ct ob er h Ju ne Ja nu ar ar c M N ov em D ec em be r be r
M onth
B rinjal
Lady's F inger
36
P otato
F ig u re 3 .8 : In d ic e s o f M o n th ly S a le o f V e g e ta b le s in C h e n n a i A U S M a rk e t : 2 0 0 0
250
200
Index Number
150
100
50
0
ay ry ly y il h be r us t ne r ru ar Ap r nu a Ju Au g te m ob e ar c M Ju be r em ov em ec D be r
Fe b
Ja
Se p
ct N
M o n th
O n io n
Cabbage
T o m a to
Fig 3.9: Monthly Sale Index of Vegetables in Kolkata Markets:2000 350 300 250 Indices 200 150 100 50 0
ar ch M ay Fe b Au g Se pt O ct ua ry Ju ne Ap Ju ly D ec N ov ril
Ja n
Month Brinjal Cabbage Cauliflower
37
Graph 3.10: Indices of Monthly Sale of Vegetables in Kolkata : 2000
600 500 Indices 400 300 200 100 0

M ay Ja nu ar y h Ap ril Ju ly Se pt Au g Fe b ct Ju ne M ar c N ov D ec O
Month
Banana
Mango
4. Survey Findings: Marketing Practices, Costs, Shares and Margins

This section examines different features of the selected fruits and vegetable markets, and the existing marketing practices followed by the selected sample respondents, marketing costs at various marketing channels, prices of various commodities marketed, and the share farmers, marketing agencies and the consumers based on the sample survey conducted in the fruit and vegetable wholesale markets in Ahmedabad, Chennai and Kolkata cities. 4.1 Profile of Sample Respondents The profile of the sample respondents viz., the commission agents, farmers and retailers was examined in terms of their education, and experience in current profession in the Ahmedabad wholesale market. The level of education of the sample respondents indicate that all the commission agents in the sample surveyed from the three markets have some formal education and a significant number of them had college education (Table 4.1). Among the sample farmer respondents, only a very few of them were without any formal education, about half of them were with schooling up to the secondary level. However, more than one-fourth of the retailer respondents were without any formal education. Thus in the Ahmedabad wholesale markets, the level of education was highest among the commission agents followed by the farmer respondents and lastly the retailers.
38
Among the farmer respondents in the Chennai wholesale markets only 5 per cent of them have education beyond primary level and as high as about 35 percent of them were illiterate (Table 4.2). The levels of education of over 50 per cent of the sample wholesalers cum commission agents as well as retailers were over higher secondary. The difference between the educational level of those in the vegetable and fruit trade was not significant, nor the difference in the educational level of wholesaler cum commission agent and the retailers. The Kolkata survey did not cover this aspect of the sample respondents. The duration of experience in their respective profession of the sample respondents from the Ahmedabad wholesale markets shown in Table 4.3 indicates that over 75 percent of the commission agents had more that 10 years experience in their present profession. Similarly about 52 percent of the sample farmers and 58 percent of the retailers also had more than 10 years experience in their respective professions. Only 8 percent of commission agents, 24 percent of the farmers and 9 percent of the retailers had below 5 years experience in their respective profession. Thus majority of the sample respondents in the Ahmedabad wholesale markets had fairly long experience in their present profession. Table 4.1: Level of Education of the Sample Respondents in Ahmedabad Markets (Percentage)
Number of Years CA CJP Market Retailer Farmer SP Market Retailer Farmer Naroda Fruit Market Retailer Farmer Farmer Total Retailer 27.6 30.3 39.5 2.6 0.0 76
CA
CA
No Formal Education Up to 7 8 to 12 13 to 15 16 and above Total Sample
0.0
3.8
32.1
0.0
9.5
30.0
0.0
16.7
16.7
0.0
CA 13.2 44.7 38.2 3.9 76
8.5
0.0 43.3 46.7 10.0 30
30.8 53.8 11.5 0.0 26
32.1 28.6 7.1 0.0 28
20.0 56.7 23.3 0.0 30
28.6 52.4 4.8 4.8 21
23.3 46.7 0.0 0.0 30
25.0 25.0 50.0 0.0 16
16.7 50.0 16.7 0.0 12
38.9 44.4 0.0 0.0 18
27.1 52.5 10.2 1.7 59
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Table 4.2 : Educational Level of Respondents, Chennai Markets (Percentage)

Type of Respondents Illiterate Primary Secondary Higher Secondary Above Higher Secondary Total
Vegetables Fruits Total Vegetables Fruits Total Vegetables Fruits Total Vegetables Fruits Total
35.0 0.0 35.0 0.0 0.0 0.0 0.0 0.0 0.0 10.0 0.0 5.8
Farmer 60.0 5.0 0.0 0.0 0.0 0.0 60.0 5.0 0.0 Wholesaler cum Commission Agent 12.5 37.5 31.3 19.4 25.8 38.7 15.9 31.7 34.9 Retailer 33.3 38.9 27.8 31.6 31.6 31.6 32.4 35.1 29.7 Overall 31.4 28.6 21.4 24.0 28.0 36.0 28.3 28.3 27.5
0.0 0.0 0.0 18.8 16.1 17.5 0.0 5.3 2.7 10.0 16.0 10.0
100 0.0 100 100 100 100 100 100 100 100 100 100
In the Chennai markets the sample respondents were in their respective profession for 5 to 20 years and in case of few wholesalers and retailers, they were in the marketing of fruits and vegetables for more than 20 years (Table 4.4). Thus the sample respondents surveyed for this study from both Ahmedabad and Chennai have fairly long experience in the marketing of fruits and vegetables. 4.2 Marketing Practice The marketing practices followed by various regulated markets are not uniform across the country. The pattern of sale and purchase of fruits and vegetables in the Ahmedabad market is shown in Table 4.5 and figure 4.1. It reveals that for vegetables, 50 per cent of the commission agents made direct purchase from farmers, whereas about 33 per cent of them purchased from traders, and 17 per cent from cold storage points. But for fruits, only 31 per cent of the purchases by the commission agents were made directly from farmers, 56 per cent from traders, and 13 per cent from other agents. Therefore, the commission agents had more direct contact with the farmers in case of vegetables as compared to fruits in the selected markets. But even for vegetables direct contact with farmers by the commission agents/traders
40
are not very high. The sales pattern revealed that by and large the commission agents sell to the retailers and the retailers directly sell to the consumers except retailer to retailer in isolated cases. Table 4.3: Experience of the Sample Respondents in their Current Profession in the Ahmedabad Markets
Number of Years CA CJP Market Retailer Farmer CA SP Market Retailer Farmer Naroda Fruit Market Retailer Farmer CA CA Total Retailer 9.2 31.6 22.4 14.5 22.4 76 Farmer 23.7 13.6 25.4 10.2 27.1 59
Upto 5 6 to 10 11 to 15 16 to 20 Above 20 Total Sample
16.7 10.0 23.3 23.3 26.7 30
42.3 15.4 3.8 3.8 34.6 26
21.4 50.0 17.9 3.6 7.1 28
0.0 13.3 16.7 26.7 43.3 30
14.3 14.3 19.0 19.0 33.3 21
3.3 23.3 23.3 23.3 26.7 30
6.3 31.3 31.3 18.8 12.5 16
0.0 8.3 83.3 8.3 0.0 12
0.0 16.7 27.8 16.7 38.9 18
7.9 15.8 22.4 23.7 30.3 76
Table 4.4 : Experience of Sample Respondents in their Respective Profession in Chennai Market (Percentage) Type of respondent Vegetables Fruits Total Vegetables Fruits Total Vegetables Fruits Total Vegetables Fruits Total Less than 5 Years 50.0 5 to 10 Years Farmer 40.0 10 to20 Years 20.0 20 to 30 Years 0.0 0.0 28.1 35.5 31.7 27.8 15.8 21.6 20.0 28.0 23.3 Total 100 100 100 100 100 100 100 100 100 100 100
50.0 40.0 20.0 Wholesaler cum Commission Agent 3.1 28.1 40.6 6.5 41.9 16.1 4.8 34.9 28.6 Retailer 11.1 27.8 33.3 5.3 42.1 36.8 8.1 35.1 35.1 Overall 18.6 31.4 32.9 6.0 42.0 24.0 13.3 35.8 29.2 41
Table 4.5: From Whom Purchased or to Whom Sold: Ahmedabad Markets

VegetaFruits Fruits bles &Veg. Number of Responses From whom Commission Agent Purchased Farmer 43 5 48 Trader 28 9 37 Commission Agent 0 2 2 Cold Storage 15 0 15 Total 86 16 102 From whom Retailer Purchased Commission Agent 122 47 169 To whom Commission Agent Sold Trader 82 16 98 Commission Agent 1 0 1 Total 83 16 99 To whom Farmer Sold Commission Agent 58 12 70 To Whom Retailer Sold Retailer 8 0 8 Consumer 112 46 158 Total 120 46 166 Particulars VegetFruits Fruits ables &Veg. Percentage Distribution 50.0 32.6 0.0 17.4 100.0 100.0 98.8 1.2 100.0 100.0 6.7 93.3 100.0 31.3 56.3 12.5 0.0 100.0 100.0 100.0 0.0 100.0 100.0 0.0 100.0 100.0 47.1 36.3 2.0 14.7 100.0 100.0 99.0 1.0 100.0 100.0 4.8 95.2 100.0
The system of sale followed by the farmer producers, commission agents and traders etc. has a bearing on the price realized by each client. This aspect has been examined for the Ahmedabad and Chennai markets The system of sale followed by the commission agents for the selected commodities in the Ahmedabad markets is given in Table 4.6 and figure 4.1. It shows that in the CJP Market, which deals with the marketing of potato and onion, open auction accounts for about 20 to 30 per cent of the market transactions, and 40 per cent of the transactions take place through secret bidding, and the rest 30 to 40 per cent through simple transaction. The open auction system is widely considered to be superior to other systems, its share was rather low. In other words, the open auction system is yet to become popular among the commission agents in the Ahmedabad CJP market. The system of sale followed by the commission agents for various vegetables in the SP market in Ahmedabad also showed the predominance of simple transaction among commission agents. For example for cauliflower, brinjal, green pea and bhindi the simple transaction accounted for about two-thirds and secret bidding accounted for over one-fourth.
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So the share of open auction was very meagre at below 10 per cent. More or less same practice was followed by the commission agents for the sale of fruits at the Naroda fruit market. Table 4.7 and figure 4.2 briefly shows the system of sale adopted by the producer farmers in the Ahmedabad markets for the selected vegetables and fruits. Simple transaction dominated the slae of potato and onion followed by secret bidding and open auction. However in the SP Market open auction system was not followed at all. For vegetables such as cabbage, cauliflower, brinjal and lady's finger, about half the transaction is through secret bidding, and another half through simple transaction. In the Naroda Fruit Market the producer farmers simple transaction followed by secret bidding and open auction was rarely in practice. Table 4.8 gives the system followed by the retailers for their purchases in the three Ahmedabad markets. For onion and potato 82 percent of the purchases was through simple transaction and the rest 18 per cent through secret bidding. The share of simple transaction in t SP market and the Naroda fruit market were respectively 50 percent and 64 percent and the rest was through simple transaction.. Even though all these markets are well equipped with basic infrastructure, administrative support etc., the system of open bidding/auction considered to be superior to other forms of sale/purchases is yet to become popular. In the Chennai AUS market the producer farmer or the grower of vegetables directly sell to the consumers while in the KFVWM wholesalers and commission agents and retailers engaged in the marketing of fruits and vegetables. In the KFVWM vegetables arriving from the producing centres are consigned to the wholesaler/commission agents. Similarly all the fruits are consigned to the traders. In this market all the wholesalers act as commission agents. The traders arrange to unload the consignments and display them in their premises and begins the sale to retailers from various parts of the city. The price of a particular day is largely influenced by the arrival during that day. All the arrivals are being sold on the same day. Simple transaction is reported by the traders who sells to the retailer who in turn make payment to the commission agent/wholesaler who ultimately makes payment to the producer farmer. The unit price quotations vary from fruit to fruit. For example, mango, sweet orange, and pineapple are quoted in numbers, banana in bunches, sapota in bags of 75 Kg, pomegranate in boxes containing 12 numbers, apple in boxes of 22 Kg.
43
Figure 4.1: System of Sale R eported by C om m ission A gents in Ahm edabad APM C M arkets
1 0 0% 9 0% 8 0% 7 0% Percentage 6 0% 5 0% 4 0% 3 0% 2 0% 1 0% 0%
w er Po ta to m at o O ni on Bh in d Br i re en C hi ku ba g an g flo na n na te Po m eg ra nj al a e i o pe a
C ab
To
C au li
V e ge ta b le s/F ruits
O pe n A uctio n
S e cret B id ding
S im p le T ra nsa cio n
Figure 4.2 System of Sale Reported by Farmers in the Ahmedabad APMC Markets: Selected
100% 90% 80% 70% Pe rc en ta ge 60% 50% 40% 30% 20% 10% 0% Onion Potato Cabbage Cauli flower Vegetables/Fruits Open Auction Secret Bidding Simple Transaction Brinjal Lady's Finger Mango
44
Ba
Table 4.6: System of Sale Reported by Commission Agents in Ahmedabad Markets Number of Respondents Percentage Distribution Commodities Open Secret Simple Open Secret Simple
Auction Bidding Transaction Auction Bidding Transaction
Onion Potato Above Vegetables Tomato Cabbage Cauli flower Brinjal Green pea Bhindi Above Vegetables Mango Banana Sapota Pomegranate Above Fruits All Fruits and Vegetables
6 5 11 1 1 1 0 1 1 5 2 0 0 0 2 18
CJP Market 14 7 17 8 31 15 SP Market 3 5 6 10 5 11 3 8 3 7 3 7 23 48 Naroda Fruit Market 4 6 0 2 4 4 2 2 10 14 64 77
22.2 16.7 19.3 11.1 5.9 5.9 0.0 9.1 9.1 6.6 16.7 0.0 0.0 0.0 7.7 11.3
51.9 56.7 54.4 33.3 35.3 29.4 27.3 27.3 27.3 30.3 33.3 0.0 50.0 50.0 38.5 40.3
25.9 26.7 26.3 55.6 58.8 64.7 72.7 63.6 63.6 63.2 50.0 100.0 50.0 50.0 53.8 48.4
Table 4.7: System of Sale Reported by Farmers in the Ahmedabad Markets Number of Respondents Percentage Distribution Commodities Open Secret Simple Open Secret Simple
Auction Bidding Transaction Auction Bidding Transaction
Onion Potato Above Vegetables Cabbage Cauli flower Brinjal Bhindi Above Vegetables Mango Above Fruits All Fruits and Vegetables
10 1 11 0 0 0 0 0 0 0 11
CJP Market 10 14 2 2 12 16 SP Market 9 9 9 9 5 6 3 4 26 28 Naroda Fruit Market 6 6 6 6 44 50
29.4 20.0 28.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 10.5
29.4 40.0 30.8 50.0 50.0 45.5 42.9 48.1 50.0 50.0 41.9
41.2 40.0 41.0 50.0 50.0 54.5 57.1 51.9 50.0 50.0 47.6
45
Table 4.8: System of Purchase Reported by Retailer in the Ahmedabad Markets Commodities Number of Respondents Secret Simple Bidding Transaction CJP Market 2 13 5 19 7 32 SP Market 13 13 21 22 9 9 18 18 5 5 19 21 85 88 Naroda Fruit Market 1 18 0 6 0 5 0 7 0 3 0 5 0 3 1 47 93 167 Percentage Distribution Secret Simple Bidding Transaction 13.3 20.8 17.9 50.0 48.8 50.0 50.0 50.0 47.5 49.1 5.3 0.0 0.0 0.0 0.0 0.0 0.0 2.1 35.8 86.7 79.2 82.1 50.0 51.2 50.0 50.0 50.0 52.5 50.9 94.7 100.0 100.0 100.0 100.0 100.0 100.0 97.9 64.2
Onion Potato Above Vegetables Tomato Cabbage Cauli flower Brinjal Green pea Bhindi Above Vegetables Mango Apple Banana Mosambi Sapota Pine-apple Pomegranate Above Fruits All Fruits and Vegetables
The vegetable growers in the nearby area of AUS brings their produce to the AUS market and most of these farmers have only smaller quantity to be offered for sale. The major attraction of this market is that there is no license fee in the market. In the KFVWM fruits and vegetables have been brought from far off places mainly through commission agents. The growers of only nearby areas participate to any significant extent in this market. The wholesalers cum commission agents have contact with the producers either directly or through agents and arrange for the delivery of fruits and vegetables. Some of the wholesalers and commission agents acts as pre-harvest contractors and lend money to the growers. The retailers purchase from the wholesaler/commission agent and sell to consumers in the markets itself or at their shops. This information was not available for the Kolkata market.
46
4.3 Cost of Marketing Various costs that are incurred in the marketing of vegetables and fruits are transport, loading/ unloading, market fee and commission. Table 4.9 provides the breakup of various items of costs in the total marketing costs of the selected vegetables and fruits. These cost shares are based on the current prices recorded in the survey. Large variations were observed in the cost shares of different commodities in the Ahmedabad markets. For example, for commodities that are brought from outside Gujarat, the share of farmers' cost in total cost was the highest. It varied from 69 percent for sweet orange to as high as 86 percent for mango. This is mainly due to high cost of transport borne by the producer farmer located at far off places from these markets. For locally produced commodities (i.e., from within the state) also transport cost dominated. Its share varied from 31 percent for potato to 75 per cent for sapota. The variation in the share of other costs such as commission, loading/unloading, market fee etc. for different commodities were not high because there were standard norms for charging such costs. Retailers' share in total marketing cost for vegetables was dominated by commission followed by transport. Retailers do not have to pay any commission to the wholesalers for commodities marketed from outside Gujarat as it is being charged from the producer farmers. Looking at the cost structure of various vegetables and fruits in the Ahmedabad markets the share of commission in total marketing costs was very significant. This implies that the cost incurred in the regulated market was high. The percentage share of various marketing costs shared by the farmers, wholesaler/ commission agent and the retailers of the KFVWM market for the selected vegetables and fruits are given in table 4.10. The marketing cost incurred by the farmers in total cost was relatively high as compared to commission agents and retailers. The share of farmers in total marketing cost ranged from 15.7 percent for cauliflower to 29.53 percent for tomato. On the other hand for fruits the share of farmers in total cost ranged from 30.1 percent for pomegranate to 74.0 percent for apple. These cost were on account of transport, loading and unloading, and commission. The relative share of farmers' cost were more for commodities such as cabbage, cauliflower, brinjal, lady's finger, and apple. For the rest commission was the major cost item incurred by the farmer producers. The commission agents/wholesalers incurred 47
three types of costs, viz., market entry fee, transport and handling charges. For all commodities the share of cost on account of transport was the highest among other costs. The share of market entry fee in total marketing cost varied from 0.05 percent for apple to 8.6 percent for pomegranate. The cost incurred by the retailers were under the heads transport, loading and unloading. This accounted for 1.33 percent for apple to 59.78 percent for lady's finger. Thus, the share of various items of costs in total cost, the cost structure in different markets varied substantially for the selected fruits and vegetables. While the share of market fee and handling charges in the form of loading and unloading were minor. The cost of transport and commission dominated the total marketing cost irrespective of commodities and markets. 4.4 Analysis of Price Spread and Farmers' Share The relative share marketing costs, marketing margin and the farmers' price in consumer rupee for the selected fruits and vegetables in Ahmedabad city are depicted in Table 4.11 and Figure 3.3. The percentage share of marketing cost in consumer rupee ranged from 1.5.5 percent for cauliflower to 18.28 percent for onion. For fruits it ranged from 5.03 percent for apple to 17.86 percent for mango. Among the selected vegetables are fruits, those with comparatively high share of marketing cost in consumer rupee were cabbage, mango, banana and sapota. The marketing costs of fruits were comparatively high and that could be mainly due to their transport cost as they have been brought to these markets from far off locations. While the marketing margin, expressed as percent of consumer price, for the selected vegetables ranged from 22.17 percent (green pea) to 50.25 percent (tomato), and for fruits it ranged from 33.14 percent for sapota to 69.43 percent for apple. For none of the commodities studied here the marketing margin was lower than one-third of the consumer rupee. The share of farmers in consumer rupee for vegetables was in the range of 41.11 percent for onion to 69.32 percent for green pea. For most of the commodities studies here the share of farmers hovered around 35 to 45 per cent. The above analysis on farmers' share in consumer rupee in the Ahmedabad markets indicated that the share of farmer in consumer rupee is generally quite low but somewhat higher for vegetables than fruits. Moreover, low share of farmers in consumer rupee was more due to high marketing margin rather than marketing cost.
48
Table 4.9 : Share of Various Marketing Costs in Ahmedabad Market (Percentage)

Commodity Cost of Producer Farmers
Transport Market Fee Comm ission Loading/ Unloading Farmer's Total Cost
Cost of Retailers
Transport Comm ission Loading/ unloading Retailer's Total Cost Total Cost
Potato (G) 27.38 3.61 Onion (OG) 54.87 1.51 Tomato (OG) 32.46 2.95 Cabbage (G) 36.38 2.67 Cabbage (OG) 47.81 2.19 Cauli flower (G) 31.39 2.67 Cauli flower (OG) 35.33 2.25 Brinjal (G) 31.65 2.50 Green pea (OG) 22.19 4.50 Lady's finger(G) 27.11 3.86 Mango(OG) 49.65 1.46 Apple(OG) 28.41 2.68 Sapota(G) 26.37 2.08 Banana(G) 31.19 1.53 Sweet Orange(OG) 23.20 1.68 Pine-apple(OG) 24.74 2.03 Pomagranate(OG) 40.26 1.90 G - Produced in Gujarat
0.00 18.09 35.38 0.00 26.17 0.00 33.91 0.00 54.04 0.00 29.17 53.63 41.70 30.58 33.62 40.57 38.10
0.00 30.98 21.59 3.63 78.10 21.90 2.46 73.25 26.75 0.00 39.04 23.46 4.52 80.70 19.30 0.00 34.06 29.08 4.06 75.54 24.46 0.00 34.15 29.29 2.80 83.52 16.48 0.00 30.97 18.79 5.86 86.14 13.86 4.26 88.98 11.02 4.97 75.13 24.87 6.12 69.42 30.58 11.32 69.82 30.18 4.95 72.29 27.71 3.95 84.21 15.79 OG - Produced Outside Gujarat
43.29 0.00 0.00 32.00 0.00 32.03 0.00 30.03 0.00 46.35 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4.13 0.00 0.00 5.50 0.00 4.82 0.00 6.53 0.00 3.89 0.00 0.00 0.00 0.00 0.00 0.00 0.00
69.02 21.90 26.75 60.96 19.30 65.94 24.46 65.85 16.48 69.03 13.86 11.02 24.87 30.58 30.18 27.71 15.79
100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100
Table 4.10: Share of Various Marketing Cost in Chennai KFVWM Market (Percentage)
Market charge paid by Farmers Trans+ Commi Total Load/ ssion unload 3.86 13.81 17.67 2.89 13.73 16.62 11.06 18.48 29.53 10.72 6.70 17.42 9.70 6.02 15.73 11.40 11.12 22.52 10.17 9.77 19.94 15.26 41.79 57.05 55.75 18.27 74.03 5.97 24.74 30.71 10.68 20.58 31.26 18.09 36.17 54.26 7.12 33.89 41.01 8.61 21.52 30.13 Charges paid by WS/CA Market Entry 3.41 3.28 2.20 4.48 2.40 0.67 0.44 0.41 0.05 5.01 6.03 1.05 0.72 8.61 Transport 51.77 49.83 27.53 39.42 33.53 27.75 13.30 23.09 24.09 31.54 39.83 15.77 35.91 50.22 Handling Charge 14.85 14.29 7.71 26.87 12.95 7.12 6.54 5.72 0.50 18.72 10.38 6.31 4.60 6.74 Total 70.03 67.39 37.44 70.77 48.87 35.54 20.28 29.22 24.64 55.27 56.24 23.13 41.22 65.57 Charge paid by retailer Trans+ Load/ unload 12.30 15.98 33.03 11.81 35.40 41.95 59.78 13.73 1.33 14.02 12.50 22.61 17.77 4.30
Commodity
Total Cost 100 100 100 100 100 100 100 100 100 100 100 100 100 100
Potato Onion Tomato Cabbage Cauliflower Brinjal Lady's finger Mango Apple Sapota Banana Mosambi Pine-apple Pomagranate
49
The share of marketing cost as percent of consumer rupee for vegetables in the Chennai KFVWM market varied from 17.30 percent for tomato to 49.3 percent for cauliflower and for fruits it varied from 15.80 percent for sweet orange to 37.49 percent for apple. Unlike Ahmedabad markets, the share of marketing costs for vegetables were comparatively high in this market than fruits. The marketing margin was in the range of 9.73 percent for potato in one extreme to 48.28 for brinjal on the other. But for fruits it varied from 9.63 percent for banana to 35.63 percent for sweet orange. As compared to Ahmedabad, the share of marketing margin consumer rupee was lower for a number of commodities in the Chennai KFVWM market. While for vegetables the farmers' share in consumer rupee ranged between 40.42 percent to 61.39 percent, for fruits it was 40.75 percent to 67.6 percent. This is almost in the same pattern observed in the Ahmedabad markets. In the AUS market the picture is quite different. Since the producer farmers sell directly to the consumers, the share of farmers in consumer rupee was high at 85 to 95.43 percent for vegetables. Since there were no middlemen involved, the only cost item was transport and loading/ unloading. Although this is only a small local market, the merits of bringing the farmer closer to the consumer in the marketing chain could substantially improve raise the share of the farmer. Perhaps such arrangements would benefit the consumer as well. In the Kolkata market the marketing cost as percent of consumer rupee was around 14 percent for vegetables and fruits except for banana it was below 8 percent. This is lower compared to both Ahmedabad and Chennai markets.The marketing margin for vegetables fluctuated between 29.24 percent for cauliflower to 39.3 percent for potato. For vegetables the share of farmers in consumer rupee was in the range of 45.93 percent for potato to 60.94 percent for tomato. While the farmers received as high as 82.29 percent of the consumer price for banana, for mango their share was only 55.75 percent. 4.5 Marketing Efficiency Indicators The marketing efficiency was examined in terms of the price difference (consumer price less price received by producer farmer), marketing cost, and margin (price difference less
50
marketing cost) for fruits and vegetables in the three cities. Variation in price difference and margin in absolute terms for the same commodity in different markets could be partly attributed to the varieties chosen for the study. Therefore, the marketing cost and margin have been expressed as percentage to the price difference. The efficiency indicators thus obtained showed that while in Ahmedabad markets the marketing cost for vegetables varied between 14 to 31 percent, this was as high as 33 to 85 percent in Chennai (KFVWM) and 27 to 34 in Kolkata markets. The margin as a percentage of farmer-consumer price difference show that the margins are very high in many cases but vary across the locations. In Ahmedabad, the margins are very high and range from 69 percent onions to 94 percent for apples. In Chennai they are relatively lower and range from 15 percent in cauliflower to 69 percent for mosambi. In Kolkata they are also very high and range from 46 percent for pineapple to 73 percent for ladys finger. The high percentage of margin to price difference is indicative of possible large trade profits (or inefficiencies), and poor marketing efficiency in fruits and vegetable. Table 4.11 : Share of Marketing Costs, Marketing Margin and Farmers' Share in Consumer Rupee in Selected Cities (Percent)
Commodity
Marke -ting Cost
Ahmedabad
Marketing Margin Farmer's Share
Chennai(KFVWM)
Marketing Cost Marketing Margin Farm-er's Share
Chennai(AUS)
Marketing Costs Farmers' Share Marketing Cost
Kolkata
Marketing Margin Farmer's Share
Potato Onion Tomato Cabbage Cauliflower Brinjal Green pea Lady's finger Mango Apple Sapota Banana Sweet Orange Pine-apple Pomagranate
8.44 18.28 8.03 11.05 5.50 9.09 8.51 7.53 17.86 5.03 13.63 14.53 11.01 11.20 11.69
32.93 40.61 50.25 43.20 37.00 48.05 22.17 36.33 38.91 69.43 33.14 45.56 54.50 46.11 48.47
58.63 41.11 41.72 45.75 68.50 42.86 69.32 56.14 43.23 25.54 53.23 39.91 34.48 42.68 39.84
28.89 25.42 17.30 42.90 49.30 29.66 na 27.04 18.73 37.49 27.83 32.92 15.80 19.86 23.23 na
9.73 20.62 34.52 16.68 8.95 22.06 34.32 13.67 21.76 11.87 9.63 35.63 20.99 33.77
61.39 53.96 48.18 40.42 41.75 48.28 na 38.65 67.60 40.75 60.30 57.45 48.57 59.15 43.00
15.00 8.00 12.00 4.57 6.20 na 6.20 Na Na Na Na Na Na Na
85.00 92.00 88.00 95.43 93.80 na 93.80 na na na na na na na
14.77 na 13.14 13.57 14.87 14.41 na 13.15 14.3 na na 7.75 na 14.83 na
39.3 na 25.92 30.7 29.24 35.51 na 35.4 29.97 na na 9.96 na 12.68 na
45.93 Na 60.94 55.73 55.89 50.08 Na 51.45 55.73 Na na 82.29 Na 72.49 na
51
Figure 4.3 : Marketing Cost, Marketing Margin and Farmer's Price in Ahmedabad APMC Markets
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
at o Ca bb ag Ca e ul if lo w er Br in ja l G re en pe La a dy 's fin ge r M an go Sa po ta Ba na na M os am bi Pi ne -a pp Po le m ag ra na te
bi M os am Pi ne -a pp le Po m eg ra na te Ba na na Sa po ta
Percentage
Po ta to
O ni on
To m
Commodity Marketing Cost Marketing Margin Farmer's Share
Fig 4.4 : Marketing Cost, Marketing Margin and Farmer's Share in Chennai KFVWM Market
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
Br in ja l f in ge r w er O ni on Ca bb ag e To m at o Po ta t flo A pp le an go M o
Percentage
La dy 's
Ca ul i
Commodity Marketing Cost Marketing Margin Farmer's Sahre
52
A pp le
Fig 4.5: Marketing Cost and Farmer's Share in Chennai AFM Market
100% 90% 80% 70% Percentage 60% 50% 40% 30% 20% 10% 0% Potato Onion Tomato Cabbage Brinjal Lady's Finger
Commodity
Marketing Costs Farmer's Share
Table 4.12 : Market Efficiency Indicators

Ahmedabad FCPD MC/ FCPD M/ FCPD FCPD MC Commodity Chennai(KFVWM) MC/ FCPD M/ FCPD FCPD MC Chennai (AUS) * MC/ FCPD M/ FCPD MC Kolkata MC/ FCPD
27.32 33.64 30.65 33.71 62.00 62.00 28.87 27.09 32.30 43.76 53.91
370.41 75.61 20.41 79.59 Potato 310.31 96.34 31.05 68.95 Onion 1181.36 162.82 13.78 86.22 Tomato 494.71 100.76 20.37 79.63 Cabbage 789.57 137.73 17.44 82.56 Cauli flower 595.46 94.76 15.91 84.09 Brinjal 858.92 238.27 27.74 72.26 Green pea 837.78 143.85 17.17 82.83 Lady's finger 813.14 255.80 31.46 68.54 Mango 5211.89 352.04 6.75 93.25 Apple 689.81 201.01 29.14 70.86 Sapota 676.00 163.50 24.19 75.81 Banana 52.56 8.84 16.81 83.19 Mosambi 103.40 20.21 19.55 80.45 Pine-apple 1303.47 253.35 19.44 80.56 Pomagranate FCPD Farmer-Consumer Price Difference Rs/Unit MC Marketing Cost Rs/Unit MC/FCPD Marketing Cost over Price Difference (%) M/FCPD Margin over Price Difference (%) where Margin = FCPD minus MC * In this market the farmers sell directly to the consumers
246.82 315.70 362.77 232.61 233.01 461.14 589.33 5670.27 645.22 345.35 3692.67 1800.00 4340.15 8550.00
184.65 174.32 121.12 167.49 197.20 264.43 259.72 3278.11 408.28 242.09 2857.13 552.90 2109.84 3485.00
74.81 55.22 33.39 72.00 84.63 57.34 44.07 57.81 63.28 70.10 77.37 30.72 48.61 40.76
25.19 44.78 66.61 28.00 15.37 42.66 55.93 42.19 36.73 29.90 22.63 69.28 51.39 59.24
120.00 40.00 120.00 32.00
53
M/ FCPD
72.68 66.36 69.35 66.29 71.13 72.91 67.70 56.24 46.09
4.6 Analysis of Factors Influencing the Prices of Fruits and Vegetables Table 4.13 provides the average ratings on the importance of different factors determining the price in the Ahmedabad wholesale markets. In the CJP Market, which deals with potatoes and onion, the factors that stand out as being of great importance are national demand, national supply and number of buyers and sellers. Market yard facilities are also indicated as importance. In the SP Market, the factors that stand out to be of great importance are local demand and supply as well as national demand and supply. The number of buyers and sellers are also indicated to be of considerable importance. In the case of Naroda Fruit Market, local demand and national supply stand out as most important. Number of buyers and sellers are also of great importance. In the opinion of commission agents, market yard facilities are also extremely important in determining the price. Note that this market has relatively poor facilities. This information was not available for the Chennai and Kolkata markets. Table 4.13 : Analysis if Factors Determining Price: Weighted Average Rating of Farmers, Commission Agents and Retailers in Ahmedabad Wholesale Markets
C J Patel Market
CA 1. Local Demand 2. National Demand 3. International Demand 4. Local Supply 5. National Supply 6. International Supply 7. Number of Buyers 8. Number of Sellers 9. Market Yard Facilities 10. Communication Facility 11. Method of Sale 12. Transport Infrastructure 13. Government Policies 14. Season 15. Variety/Type 16. Processing Facilities 17. Cold Storage facilities 18. Weather Conditions Farmer Retailer CA
Sardar Patel Market

Farmer Retailer CA
Naroda Fruits Market

Farmer Retailer
3.37 4.67 1.83 3.30 4.33 1.10 3.59 3.48 3.25 3.86 3.57 2.79 3.48 2.07 3.77 1.13 1.85 1.93
3.32 4.32 3.18 3.36 3.96 1.00 3.33 3.33 1.18 2.67 3.43 3.13 3.50 2.50 3.71 1.22 1.22 2.09
2.96 4.56 2.33 3.32 3.33 3.40 3.44 2.11 2.33 3.00 2.78 3.55 2.40 3.38 1.00 1.87
3.67 3.93 2.75 3.73 4.03 4.03 4.20 2.72 2.67 2.71 2.43 2.89 3.70 3.80 3.40
4.67 4.19 1.86 4.05 3.95 1.55 4.57 3.62 1.29 1.71 3.76 2.29 1.24 4.52 3.57 1.67 1.50 2.81
4.45 3.79 1.78 4.07 3.96 2.00 3.38 3.39 1.38 1.00 4.44 3.06 1.00 4.03 3.81 1.60 3.10
4.00 3.50 3.56 4.20 4.63 4.63 5.00 2.38 2.00 2.44 1.00 4.63 4.63 4.25
4.00 3.83 4.00 4.08 3.00 4.00 4.00 1.92 3.00 3.00 3.00 4.25 5.00 4.25
4.89 3.50 1.20 3.72 3.61 1.67 3.56 3.56 1.13 3.17 4.67 3.22 1.00 3.50 3.33 1.00 1.00 2.78
Rating Scale: 5 Very Important 4 3 Important 2 1 Not Important
54
5. Summary and Conclusions

Fruits and vegetables constitute an important part of daily diet and are now in great demand round the year. India now ranks first in the world in the combined production of fruits and vegetables. At present the horticultural crops in the country covers 13.6 million hectares of land, i.e. 7 per cent of the gross cropped area and contributes to about 18-20 per cent of the gross value of agricultural output. India's share in World fruit production is very significant, the largest producer of mango and banana in the world and fifth position in the production of pineapple and sixth in the production of orange, tenth in the production of apple. Similarly India's presence in the production of vegetables is also very significant. Among the production of major vegetables, India occupies the first position in cauliflower, second in onion, third in cabbage, and sixth in potato in the world. The diverse soil and climatic conditions in the country gives great promise to cultivate a wide variety of fruits and vegetables . Traditionally Indian farmers depend heavily on middlemen particularly in the marketing of fruits and vegetables. There has been great concern in recent years about the efficiency of fruits and vegetable marketing. It is feared that low efficiency in the marketing channels accompanied with poor marketing infrastructure would not only lead to high and fluctuating consumer prices, but also only a small fraction of the consumer rupee reaching the producer farmer. It may also leads to deterioration in quality, frequent mismatch between demand and supply both spatially and over time resulting to highly fluctuating prices. In the light of these concerns studies were undertaken at the wholesale market level for fruits and vegetables in Ahmedabad, Chennai , Kolkata and Delhi cities. This study consolidates the major findings of the studies that are conducted at Ahmedabad, Chennai and Kolkota. These studies mainly address issues such as present marketing practices of fruits and vegetables, the seasonal phenomenon in terms of their market arrival/sale, the physical market infrastructure at the selected markets, existing major marketing channel and lastly the price spread in fruits and vegetable marketing and the share of producers in consumer rupee. 5.1 Methodology The study covered two wholesale vegetable market yards from Ahmedabad city viz., the Sardar Patel Market (SP Market), Chimanbhai Jivabhai Patel Market (CJP Market), and one fruit market namely the Naroda fruit market. From the Chennai City, two wholesale markets
55
namely Koyambedu Fruits and Vegetable Wholesale Market (KFVWM), and Ambattur Farmer's Market (AUS) also known as Ambattur Ezhawar Sandhai were selected. From the Kolkata city markets that were selected for this study are S.S.Hogg market, Posta market and Mechua Fal Patty. While the market officials and records were consulted for collecting relevant data on the functioning of the markets, physical infrastructure etc of the markets., structured questionnaires were used to collect the information from the market intermediaries such as wholesalers/ commission agent, retailers and the producer farmers. The sample respondents from the Ahmedabad markets comprise of 76 commission agents, 76 retailers and 59; from the Chennai markets 63 commission agents/ wholesalers, 37 retailers and 20 farmers, and 18 commission agents/ wholesalers and 12 retailers from the Kolkata wholesale markets. The selection of different vegetables and fruits from these markets were based on their importance in terms of volume of sale in the respective markets. The vegetables selected for the study from the Ahmedabad market were potato, onion, tomato, cabbage, cauliflower, brinjal, green-pea and lady's finger and the fruits were mango, apple, sapota, banana, sweet orange, pineapple and pomegranate. From the Chennai markets vegetables such as brinjal, lady's finger, onion, potato, cabbage, cauliflower and tomato and fruits such as mango, apple, sapota, banana, sweet orange, pineapple and pomegranate were selected for the study. From the Kolkata markets vegetables namely potato, brinjal, lady's finger, cabbage, cauliflower, and tomato and fruits such as mango, pineapple and banana have been selected. The administrative set-up of the selected markets do differ. While the markets selected from Ahmedabad were regulated, the other markets were not. Agricultural Produce Marketing Committee (APMC) controls and administers the selected regulated markets in Ahmedabad. The market management committee headed by the chief administrative officer of the Chennai Metropolitan Development Authority (CMDA) and the Kancheepuram market committee respectively controls the KFVWM and the AUS markets in Chennai. As mentioned above, in the Kolkata City there are no regulated markets for the sale of fruits and vegetables and all the markets are controlled by the Municipal Corporation and the Government of West Bengal. 5.2 Market Infrastructure Various infrastructure facilities available in the Ahmedabad CJP market include stalls for vegetable and fruits sale, shops meant for the sale of agricultural inputs, internal roads,
56
private telephone exchange, offices for the stall-holders, sanitary facilities for general public and stall visitors, canteen facilities, conference hall, garden, fountain, kiosk systems, VIP guest-house and internet facilities. The Sardar Patel market at Ahmedabad has stalls, ring stalls, a common shed for general commission agent, stalls used for the sale of agricultural inputs, and other household items, sanitary and communication facilities. Naroda Fruits Market is also equipped with stalls for Commission Agents and semi-wholesalers and retailers and all these stalls are under private ownership and the APMC only has the administrative control on trading activities. This market does not have any other facilities except market office, stalls and internal roads. The salient features of the KFVWM market which is situated on the ChennaiThirupathy highway, are stalls equipped with telephone facilities, stalls run by self-help groups, vehicle parking facility, canteen facilities and facilities for waste disposals. Services of weighing machines have been provided to the farmer sellers free of cost. In AUS market, the facilities provided include weighing machines and price display boards. 5.3 Market Charges Various components of marketing costs that are incurred in the selected markets include market fee, commission, transport, loading and unloading charges. The rate of commission in the Ahmedabad markets was 6 per cent of the value of produce, and the market fee at the rate of 0.5 per cent and both are charged from the purchaser. While the commission amount goes to the trader/commission agent, the market fee accrues to the APMC. The only exception is that of the seller is from outside the state of Gujarat, the market fee is to be paid by the seller. The association of traders in fruits and vegetables determines the market charges in the KFVWM. The present the rate of commission charged in this market is 6 percent for vegetables and 10 percent for fruits. 5.4 Market Arrival/ Sale of Fruits and Vegetables The APMC records the market arrival of 35 commodities. In terms of market arrival, potato holds the top position followed by onion, tomato, green chilies, brinjal, ginger, greenpea and lady's finger respectively in terms of their volume. In Naroda regulated market the arrival of 24 different fruits are recorded and in terms of their volume of arrival, they are in the order of mango, apple, sweet orange, pineapple, sapota and pomegranate. The seasonality in the market arrival of selected vegetables showed extreme seasonality except for potato and 57
onion. The monthly sales pattern of selected fruits in the Naroda Fruit Market also showed extreme seasonality in case of mango and apple. On the whole the variation in monthly sale of selected fruits were relatively high as compared to that of vegetables in the Ahmedabad regulated markets. In the Chennai markets for all the selected vegetables high sales were invariably recorded during May to July. Compared to Ahmedabad and Chennai, the monthly sales pattern in the Kolkata wholesale market was highly skewed except for brinjal. 5.5 Profile of Market Participants The profiles of the sample respondents from the selected markets have been examined in terms of their education, and their experience in the current profession. The level of education of the sample respondents in the Ahmedabad markets indicate that all the commission agents in the sample surveyed are not only with some formal education but a significant number of them also have college education. Though few of the sample farmer respondents were without any formal education, about half of the farmer respondents are atleast with schooling up to the secondary level. However for more than one-fourth of the retailer respondents were without any formal education. Among the farmer respondents only 5 per cent of the sample farmers have education beyond primary level in the Chennai Markets and the level of education of over 50 per cent of the sample wholesalers cum commission agents as well as retailers in the selected markets were over higher secondary. The difference between the educational level of those in the vegetable and fruit trade was not significant, nor the difference in the educational level of wholesaler cum commission agent and the retailers. The experience of sample respondents in their respective profession indicated that over 75 percent of the commission agents had more that 10 years experience in their profession, 52 percent of the sample farmers and 58 percent of the retailers had more than 10 years experience in their respective professions in the Ahmedabad market. In Chennai market only 8 percent of the commission agents, 24 percent of the farmers and 9 percent of the retailers had experience below 5 years in their respective professions. Thus, majority of the sample respondents are with some formal education and vast experience in their respective profession. 5.6 Marketing Practices The pattern of purchase and sale of vegetables and fruits in the Ahmedabad markets reveals that about 50 per cent of the commission agents make direct purchase from farmers, 58
whereas about 33 per cent from traders, and the rest made the purchases from cold storage points. But for fruits, the commission agents made only 31 per cent of the purchases directly from farmers and 56 per cent are from traders, and 13 per cent are from commission agents. Therefore, direct contact between commission agents and farmers was comparatively higher in case of vegetables than fruits in the Ahmedabad markets. By and large the commission agents sell to the retailers and the retailers sell directly to the consumers except retailer to retailer in isolated cases. The system of sale followed by the commission agents in the Ahmedabad markets shows that in the CJP Market open auction accounts for hardly one-fifth of the totalmarket transactions. Secret bidding and simple transaction were more popular in this market accounts for 40 per cent each. In the Naroda fruit market also one-half of the marketing take place through secret bidding and the rest by means of open marketing system and the system of sale through open auction was virtually absent. Thus, open auction system is not yet a common and established practice in the Ahmedabad wholesale markets for fruits and vegetables. This is despite of open auction system being considered to be superior to other systems. In the Chennai AUS market the producers directly sell vegetables to the consumers and in the KFVWM open system of marketing dominated. 5.7 Cost of Marketing Major costs that are involved in the marketing of vegetables and fruits in the selected markets are transport, loading/unloading, market fee and the commission charged by the middlemen. The share of farmers in total marketing cost of vegetables varied from 15.7 percent for cauliflower to 29.53 percent for tomato. The share of farmers in average total marketing cost for fruits ranged from 30.1 percent for pomegranate to 74.0 percent for apple. The reported costs of farmers were on account of transport, loading and unloading, and commission. For commodities such as cabbage, cauliflower, brinjal, lady's finger, and apple the share of farmers in total cost was comparatively higher. For other commodities commission was the major among various costs. The commission agent/ wholesaler incurred three types of costs, viz., market entry fee, transport and handling charges. For all commodities cost on transport was invariably high as compared to other costs. In the Chennai market, the relative share of marketing cost of the farmers in total cost was more than that incurred by commission agents as well as the retailers.
59
The cost incurred by the farmers varied from 15.7 percent for cauliflower to 29.5 percent for tomato and for fruits it varied from 30.1 percent for pomegranate to 74 percent for apple. Thus the share of various components in total cost exhibited significant variation for both fruits and vegetables in different markets studied here. 5.8 Analysis of Prices Spread and Farmers' Share The share of marketing cost in consumer price were in the range from 5.5 percent for potato to 18.3 percent for onion in the Ahmedabad wholesale markets. But for the selected fruits it varied from 5.1 percent for apple to 17.9 percent for mango. The marketing costs of fruits (in terms of percentage to consumer price) appeared to be at a higher level than vegetables. While the marketing margin, expressed as a percentage of consumer price, for vegetables were in the range of 22.2 percent (green pea) to 50.3 percent (tomato) and for fruits it varied from 33.1 percent for sapota to 69.4 percent for apple. Finally, the share of farmers in consumer rupee for vegetables ranged from only 41.1 percent for onion to as high a s 69.3 percent for green pea, and for the selected fruits this share varied from only 25.5 percent for apple to 53.2 percent for sapota. Thus, the analysis of farmers' share in consumer rupee in the Ahmedabad regulated wholesale markets indicates that the share is quite low in general but somewhat better for vegetables than for fruits. In the Chennai KFVWM market the share of marketing cost in total cost for vegetables varied from 17.3 percent for tomato to 49.3 percent for cauliflower, and for fruits it varied from 15.8 percent for sweet orange to 37.5 percent for apple. The marketing margin was in the range of 9.7 percent for potato and 48.3 for brinjal. But for fruits it varied from 9.6 percent for banana to 35.6 percent for sweet orange. While for vegetables the farmers' share ranged between 40.4 percent to 61.4 percent, for fruits it was 40.75 percent to 67.6 percent. These patterns are very much similar compared to Ahmedabad markets. But in the AUS market since the producer farmers sell directly to the consumers, the share of farmers in consumer rupee was as high as 85 to 95.43 percent for vegetables. This is only a very small market with limited volume. Yet, it shows that marketing arrangements which bring the farmer closer to the consumer in the marketing chain has the potential to raise the share of the farmers substantially, and perhaps the consumer would also be benefited with better quality and prices.
60
In the Kolkata market the marketing cost was around 14 percent for the vegetables and fruits studied except for banana it was roughly 8 percent. The marketing margin for vegetables fluctuated between 29.2 percent for cauliflower to 39.3 percent for potato. The share of farmers were in the range of 45.9 percent for potato to 60.9 percent for tomato. While the farmers received as high as 82.3 percent of the consumer price for banana, their share was only 55.7 percent in mango. The marketing efficiency was examined in terms of the price difference (consumer price less price received by farmer), marketing cost, and margin (price difference less marketing cost). The marketing cost, and margin were expressed as percentage of the price difference. These efficiency indicators showed that while in Ahmedabad markets the marketing cost for vegetables varied between 14 to 31 percent, this was 33 to 85 percent in Chennai (KFVWM) and 27 to 34 in Kolkata markets. The margin as a percentage of farmer-consumer price difference shows that the margins are very high in many cases but vary across the locations. In Ahmedabad, the margins are very high and range from 69 percent onions to 94 percent for apples. In Chennai they are relatively lower and range from 15 percent in cauliflower to 69 percent for mosambi. In Kolkata they are also very high and range from 46 percent for pineapple to 73 percent for ladys finger. The high percentage of margin to price difference is indicative of possible large trade profits (or inefficiencies), and relatively poor marketing efficiency in fruits and vegetable. 5.9 Analysis of Factors Influencing the Prices of Fruits and Vegetables The average ratings on the importance of different factors determining the price were examined through survey of respondents in the markets for the Ahmedabad wholesale markets. In the CJP Market, which deals with potato and onion, the factors that stand out as being of great importance are national demand, national supply and number of buyers and sellers. Market yard facilities are also indicated to be of importance. In the SP Market, which deals with other vegetables, the factors that stand out to be of great importance are local demand and supply followed by national demand and supply. The number of buyers and sellers are also indicated to be of considerable importance. In the case of Naroda Fruit Market, local demand and national supply stand out as most important. In the opinion of commission agents, market
61
yard facilities are also extremely important in determining the price. These aspects were not studied for the Chennai and Kolkata markets as they were not covered in those studies. 5.10 Recommendations Several measures are recommended for improving the marketing of fruits and vegetables in the country. The following major recommendations emerge from the studies reported here on improving the marketing efficiency of fruits and vegetables. First, it is important to bring more markets under regulation and put them under the supervision of a wellrepresented market committee. Second it is important to promote, and perhaps even enforce through rules or laws, the practice of open auction in the markets. Third, it is important to bring more numbers of buyers and sellers to the wholesale markets so as to encourage healthy competition close to perfect market conditions and better price realisation to the producer farmers. How direct participation of farmers significantly improve their share is clearly evident from Chennai's AUS market. Besides above measures, improvements in market infrastructure such as storage (godown) facilities, cold storage, better loading and weighing facilities, proper stalls, better road links etc. would also be helpful in improving the marketing efficiency. Improvement in coldchain facilities, marketing of fruits and vegetables are obviously important and do not need any special mention. Efforts to improve the transparency in the market operations through better supervision by the market committee would be another important factor in improving the marketing efficiency. Finally there is substantial scope for improving the marketing efficiency by improving the market information system by making available latest and extensive market information to all market participants through the use of internet facilities and other means of communication.
62
Bibliography 1. 2. 3. Agro Economic Research Centre, Chennai, Martketing of Fruits and Vegetables in and Around Chennai, University of madras, 2002-03 (Research Study No.130) Arya, Anita Agricultural Marketing in Gujarat, Concept Publishing Co. Ltd., New Delhi, 1993. Ashturker B.M and C.D. Deole, Producers Share in Consumers Rupee: A Case Study of Fruit marketing in Marathwada, Indian Journal of Agricultural Economics, 40,3, 1985. Bhatt, B.D. et al. An Analysis of Arrivals and Prices of Important Vegetable Crops in Ahmedabad Regulated Market in Gujarat State, Indian Journal of Agricultural Marketing, 1(1), June 1988. Charan, A.S., SP Seetharaman and SL Bapna, Agricultural Marketing System in Gujarat: A Perspective, Gujarat Economic Conference, 1983. Dave, V.J., Economics of Export Oriented Horticultural Crops in Chiku (Sapota) in Gujarat, Agro-Economic Research Centre, Vallabh Vidyanagar, Gujarat, 1998. Dattatreyulu, M., Export Potential of Fruits, Vegetables and Flowers from India, National Bank for Agriculture and Rural Development, Mumbai, 1997. Dhar, M.K., BA Baig, Price Structure of Kashmir Apples, Indian Journal of Agricultural Economics, 40, 3, 1985. Doshi, R.R (ed.) Agricultural Marketing in India: The Future Course, Department of Economics, Shivaji University, Kolhapur, 1998 Gandhi Vasant P and N V Namboodiri, Marketing of Fruits and Vegetables in India: A Study of the Wholesale Markets in Ahmedabad Area, Centre for Management in Agriculture, Indian Institute of Management, Ahmedabad, 2002 Garg J S, and J P Misra, Costs and Margins in the Marketing of Vegetables in Kanpur, Agricultural Marketing, 8,2, 1976 Jha, U.M., Economics of Export Oriented Horticultural Crop(Litchi) Bihar, AgroEconomic Research Centre, Bihar, 1997 Joshi, U.R. Regulated Markets in Gujarat, Vallabh Vidyanagar, SP University, 1971. Kaul, G.L, Horticulture in India: Production, Marketing and Processing, Indian Journal of Agricultural Economics, 52,3, 1997 Kazi MB Rahim and Debashis Sarkar, Fruits and vegetables Mandis Located in Urban and Semi-urban Areas of West Bengal with focus on Kolkata Market: Their Problems and Suggestions, Agro-Economic Research Centre, Visva-Bharati, Santiniketan, 2002 Krishnaswamy L, et al., A Study of Price Spread of Wheat in Rajasthan, Agricultural Situation in India, 23,4, 1968 Kumar P and Mruthyunjaya, Demand for Fruits and Vegetables, Agricultural Economics Research Review, 8,2, 1995 63
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Marketing of Fruits and Vegetables in India: A Study Covering The Ahmedabad, Chennai and Kolkata Markets

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Marketing of Fruits and Vegetables in India: A Study Covering The Ahmedabad, Chennai and Kolkata Markets

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Marketing of Fruits and Vegetables in India: A Study Covering the Ahmedabad, Chennai and Kolkata Markets

84 81 46 211 100 20 120

2. Overview of Fruit and Vegetable Economy of India

3. Market Infrastructure, Marketing Practices and Patterns

Sardar Patel Market

Naroda Fruits Market:

200 150 100 50 0

Month Cauliflower Brinjal Green Pea Lady's Finger

160 140 120 100 80 60 40 20 0

M onth M ango Apple Sapota Banana

F re3.6: In s o M igu dice f onthlyS leo FruitsinA m da dC :19 a f h e ba ity 99 2 0 00

0 a O be N ve be e m r Ja ua Fe ry M rch cto r o m rD ce be n ry brua A ril p My a Ju ne Ju A gu ly u st S pte be e m r

F igure 3.7: Indices of M onthly Sale of Vegetables in C hennai A U S M arket : 2000

Month Brinjal Cabbage Cauliflower

Graph 3.10: Indices of Monthly Sale of Vegetables in Kolkata : 2000

600 500 Indices 400 300 200 100 0

4. Survey Findings: Marketing Practices, Costs, Shares and Margins

No Formal Education Up to 7 8 to 12 13 to 15 16 and above Total Sample

CA 13.2 44.7 38.2 3.9 76

0.0 43.3 46.7 10.0 30

30.8 53.8 11.5 0.0 26

32.1 28.6 7.1 0.0 28

20.0 56.7 23.3 0.0 30

28.6 52.4 4.8 4.8 21

23.3 46.7 0.0 0.0 30

25.0 25.0 50.0 0.0 16

16.7 50.0 16.7 0.0 12

38.9 44.4 0.0 0.0 18

27.1 52.5 10.2 1.7 59

Table 4.2 : Educational Level of Respondents, Chennai Markets (Percentage)

Upto 5 6 to 10 11 to 15 16 to 20 Above 20 Total Sample

16.7 10.0 23.3 23.3 26.7 30

42.3 15.4 3.8 3.8 34.6 26

21.4 50.0 17.9 3.6 7.1 28

0.0 13.3 16.7 26.7 43.3 30

14.3 14.3 19.0 19.0 33.3 21

3.3 23.3 23.3 23.3 26.7 30

6.3 31.3 31.3 18.8 12.5 16

0.0 8.3 83.3 8.3 0.0 12

0.0 16.7 27.8 16.7 38.9 18

7.9 15.8 22.4 23.7 30.3 76

Table 4.5: From Whom Purchased or to Whom Sold: Ahmedabad Markets

CJP Market 14 7 17 8 31 15 SP Market 3 5 6 10 5 11 3 8 3 7 3 7 23 48 Naroda Fruit Market 4 6 0 2 4 4 2 2 10 14 64 77

CJP Market 10 14 2 2 12 16 SP Market 9 9 9 9 5 6 3 4 26 28 Naroda Fruit Market 6 6 6 6 44 50

Table 4.9 : Share of Various Marketing Costs in Ahmedabad Market (Percentage)

15.00 8.00 12.00 4.57 6.20 na 6.20 Na Na Na Na Na Na Na

85.00 92.00 88.00 95.43 93.80 na 93.80 na na na na na na na

14.77 na 13.14 13.57 14.87 14.41 na 13.15 14.3 na na 7.75 na 14.83 na

39.3 na 25.92 30.7 29.24 35.51 na 35.4 29.97 na na 9.96 na 12.68 na

45.93 Na 60.94 55.73 55.89 50.08 Na 51.45 55.73 Na na 82.29 Na 72.49 na

Commodity Marketing Cost Marketing Margin Farmer's Share

Commodity Marketing Cost Marketing Margin Farmer's Sahre

Table 4.12 : Market Efficiency Indicators

120.00 40.00 120.00 32.00

Sardar Patel Market

Naroda Fruits Market

Rating Scale: 5 Very Important 4 3 Important 2 1 Not Important

5. Summary and Conclusions

11. 12. 13. 14. 15.

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